Travel stocks rally as Britain considers easing restrictions for vaccinated people

A sign displayed outside Terminal 3 at Heathrow airport in London on 3 June 2021 indicates that the terminal is closed to departure flights
The Department for Transport said on Thursday that it was considering how vaccinations could be used for inbound travel. Photo: Daniel Leal-Olivas/AFP via Getty Images

Travel stocks steamed ahead on Thursday after reports revealed that the UK is mulling a lifting of travel restrictions for holidaymakers who are fully vaccinated.

According to government sources, this would mean that those who have received both doses of the coronavirus vaccine can avoid having to quarantine on their return from amber-listed countries.

Travellers leaving the UK at the moment are allowed to use the NHS app to prove their vaccine status, and can cut quarantine in some countries. The Department for Transport said on Thursday, however, that it was considering how vaccinations could be used for inbound travel.

The news sent shares in British Airways owner IAG (IAG.L) more than 3% higher in London, while easyJet (EZJ.L) climbed 3.8%, and Wizz Air (WIZZ.L) and TUI (TUI.L) were 1.4% and 4% up, respectively.

Travel stocks, such as British Airways parent IAG, surged on Thursday on the back of the news. Chart: Yahoo Finance
Travel stocks, such as British Airways parent IAG, surged on Thursday on the back of the news. Chart: Yahoo Finance

More than half of British adults have received both doses of COVID-19 vaccine, putting the UK far ahead of the rest of Europe.

However, the European Union has already said it is looking to allow fully vaccinated people to avoid COVID test and quarantine from next month. Last week, ambassadors from the 27 EU member states approved a modified European Commission (EC) proposal that people who have been fully vaccinated for 14 days should be able to travel freely from one EU country to another.

It comes as aviation businesses, including Ryanair (RYA.L) and the owner of Manchester, London Stansted and East Midlands airports, have been threatening legal action against the government’s restrictions on overseas trips.

They are urging the government to provide more transparency about how it decides which countries qualify for the green list of safe places to travel.

Michael O’Leary, the chief executive of Ryanair, has previously called the UK's travel policy "a shambles".

Watch: Ryanair accuses PM of travel 'shambles' and demands vaccine-led approach

Only a handful of destinations are on the UK’s green list, with major destinations in Europe, such as Spain, France and Italy, on the amber list, as well as the US. Around 50 territories are on the red list, based on their COVID risk.

"We have commenced work to consider the role of vaccinations in shaping a different set of health and testing measures for inbound travel," a government spokesperson said.

Earlier this month, UK ministers removed Portugal from its green travel list amid concern over rising coronavirus cases. The holiday destination is now on the amber list, meaning that travellers have to quarantine for 10 days on their return, as well as pay for two PCR tests.

Read more: EasyJet launches 12 new UK domestic routes amid staycation boom

Scientists at the Joint Biosecurity Centre (JBC) warned of rising COVID infection rates and the emergence of variants in the country. Rates rose from 33 cases to 51 cases per 100,000 at the time of the decision.

Portugal, along with 11 other destinations, was rated green by UK ministers just three weeks earlier.

The travel list is due to be updated on 24 June, and the government confirmed in April that it would review its travel policy before the end of this month.

Watch: Should I book a holiday in 2021?