Investors are worried about the recent rise in infections in parts of Europe and the resulting implications for travel. Spain, for example, has seen a spike in new cases since July 15. According to Reuters, which cited data from the Ministry of Health, new infections have exceeded 900 in recent days, a level not seen since the country reopened its economy in late May. .
The British government surprised many tourists this weekend with the decision to remove Spain from the list of countries exempt from quarantine upon their arrival in England. This came after the regions of Catalonia, Aragon, Madrid and Pais Vasco saw an increase in the number of Covid-19 cases. The Spanish government said regional epidemics were under control and the country was safe for Spaniards and visiting tourists.
Tui has decided to cancel all vacations in mainland Spain until August 9. Ryanair has said it will not cut flights to Spain and said the UK government’s move was “regrettable”.
France has also advised its citizens to avoid traveling to the worst affected regions of Spain.
Luxembourg, Romania, Bulgaria, Sweden and Spain recorded the highest number of cumulative infections (per 100,000 people) in the last 14 days in the region, according to the European Center for Prevention and Control diseases.
This has led, for example, to the Greek government requesting a negative test result for those traveling to the country from Bulgaria and Romania.
“I don’t think this has an immediate major economic consequence (compared to what we already have) but if it happens in the height of summer, it raises the question of where we will be in November,” Deutsche Bank analysts said. in a note Monday regarding recent cases in Europe.
Some analysts expected the summer months in Europe to be much calmer in terms of new cases, associating the winter period, when people tend to catch colds and flu, as the most likely time for a second wave in the region. Disease specialists have argued that a recent increase in cases may in fact be simply a continuation of the first wave, and some suggest that the number of infections should drop below a single number in a country for the first wave is classified as completed.
“We believe the sudden change in (UK) government policy could have a negative impact on guest confidence in booking,” Jefferies analysts said in a note on Monday, suggesting that tourists might opt for cations to stay or just don’t take a vacation this summer.
Ryanair staff member in protective masks is seen presenting a safety flight information at Krakow Balice Airport.
NurPhoto | NurPhoto | Getty Images
While this can boost domestic tourism industries, it poses challenges for airlines and the wider sector in Europe. Ryanair said on Monday morning that it expected a “very difficult year” due to uncertainty over the coronavirus.
“It’s impossible to predict how long the Covid-19 pandemic will persist, and a second wave of Covid-19 cases across Europe in late fall (when the annual flu season begins) is our biggest fear at the moment, ”said the Irish carrier. .
Speaking to CNBC on Monday, Mark Manduca, chief executive of Citi Research, said the sudden restrictions would be the “new normal” for short-haul flights in Europe, which until recently seemed the only viable option for investors. in the area amid border closures.
He explained that the recent change in quarantine policy in the UK has meant that “summer can be removed at any time” and that this will create a “domino effect in the European (airline) market.”
Other regions of the world, including India and Hong Kong, have also reported higher numbers of infections. At the same time, the situation in the United States and Latin America is far from under control.