Travel giants fall on Bastille Day terror tragedy

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The horrific Nice massacre struck airlines and tourism stocks hard today, leaving easyJet floundering at the bottom of the FTSE 100 as investors absorbed the impact of another terror attack in Europe.

About 15% of easyJet’s total seat capacity involves flights that begin or end in France. 

After the atrocity in Nice that killed more than 80 people celebrating Bastille Day, the budget carrier, which is also the largest airline at Nice airport, flying 3.7 million passengers to and from it each year, saw its shares slide 45p, or 3.8%, to 1126p.

The airline, headed by Carolyn McCall, told passengers scheduled to travel to or from the French city that it was flying as normal but anyone who wanted to cancel would receive a free refund, adding: “EasyJet’s thoughts are with the family and friends of the victims of the attack in Nice.”

Other transport and tourism firms, already struck by investors’ nerves over Brits’ future discretionary spending after Brexit, were also damaged. 

Thomson owner Tui fell 14p to 958.5p. IAG, the owner of British Airways, was off nearly 2% at the open, but recovered to settle down 3.8p at 422.2p. 

InterContinental Hotels lost 21p to 2829p. Thomas Cook dropped 3%, or 1.8p, to 64.8p, Flybe shed 2.5% to 38.7p and the FTSE 350 Travel & Leisure index dropped by as much as 1%. 

“The tragic events in Nice have added to the general uncertainty on demand,” said Robin Byde, transport analyst at Cantor Fitzgerald. 

“All eyes will be on forward bookings as easyJet, IAG, Ryanair and others report quarterly earnings in the next few weeks. For investors, this earnings season will be one of the more crucial in recent years.” 

Tony Cross, market analyst at Trustnet Direct, was gloomy, saying the attack “is likely to act as a further deterrent to travel”.

French tourism and transport stocks also took a hit. Hotels chain Accor was down just over 3%, Eurotunnel lost more than 1%, and Air France KLM was 2% lower.

Analysts also warned of another hit on luxury demand, making Asians and Americans think twice about travelling to Europe.

France has the highest number of tourists in the world, with 83 million visitors last year generating around 7% of its overall economy. 

Shares in LVMH Moët Hennessy Louis Vuitton fell 2%, as Neil Wilson at ETX Capital said the luxury market was “losing its lustre”. 

He added: “When LVMH posted downbeat first-quarter earnings, it noted sales were “affected by a fall in tourism” after the Paris attacks in November. The latest killings in France could put further pressure on the sector.”

Source Article from http://www.standard.co.uk/business/travel-giants-fall-on-bastille-day-terror-tragedy-a3296906.html

July 15, 2016 |
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