Airline stocks rise on lockdown hopes and Lufthansa bailout
Airline stocks were among the best performers on the FTSE 100 this morning as investors were cheered by further easing of lockdown measures and Lufthansa’s rescue deal.
On Monday Germany agreed a €9bn lifeline for Lufthansa, agreeing a bailout plan which gives the government a veto in the event of a hostile bid.
The German government will get a 20 per cent stake in Lufthansa, which could rise to 25 per cent plus one share in the event of a takeover. The finance and economy ministries said the airline had been operationally healthy and profitable with good prospects, but had run into trouble because of the coronavirus outbreak.
Optimism over the rescue package was bolstered by Spain’s announcement that it will stop quarantining arrivals from 1 July.
Prime Minister Boris Johnson yesterday also signalled the further easing of lockdown restrictions, with all non-essential shops set to reopen from 15 June.
Investors took comfort in the news with airlines leading the FTSE 100 risers. British Airways owner IAG shares were up nearly 15 per cent in early trading.
Easyjet, whose finance chief quit this morning, also rose 11.12 per cent as investors started to return to travel stocks amid positive developments for the embattled sector.
Holiday operator Tui soared more than 30 per cent in early trading on the news that the Spanish government would start to allow tourists back into the country.
Ryanair shares rose 7.71 per cent and the budget airline welcomed the Spanish government’s announcement. It said it had confirmed plans to operate 40 per cent of its normal July flight schedule.
Chief executive Eddie Wilson said: “Ryanair will be offering up to 1,000 daily flights from 1 July, and we have a range of low fare seat sales, perfect for that summer getaway, which we know many parents and their kids will be looking forward to as we move out of lockdown and into the school holidays.”
The airline said flights will operate with new health guidelines “which will require all passengers (and Ryanair crews) to wear face masks at all times in the airport terminals and on board our aircraft, in compliance with EU guidelines.”