Airline stocks get a knock back as Greek wildfires rescue mission begins, 24 Jul 2023 10:46

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Airline stocks get a knock back as Greek wildfires rescue mission begins

24 July 2023, 10:46

Temperatures of 40 degrees Celsius have triggered wildfires across a number of popular holiday destinations / Image source: Adobe

19,000 people forced to leave their homes in Rhodes
EasyJet shares down over 3% in early trading
Airlines begin rescue mission from Greek islands

Airline stocks fell across the board in morning trading amid a flurry of flight cancellations and the start of a widespread rescue operation of holidaymakers from the Greek wildfires in Corfu and Rhodes.

EasyJet (EZJ) and Jet2(JET2) both lost 3% or so at 459p and £11.50 respectively, while TUI (TUI) and BA-owner International Consolidated Airlines (IAG) slipped around 2%a piece.

For nearly a week southern Europe has been roasted by soaring temperatures of 40-plus degrees Celsius, triggering wildfires in popular holiday destinations such as Corfu and Rhodes.

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Fires on Rhodes have already forced 19,000 people to leave their homes and holidaymakers to abandon their hotels, many having to sleep in airports.

Corfu and Evia are the latest Greek islands to issue an evacuation order.

EasyJet announced it would operate two rescue flights with a total of 421 seats today, and a third on Tuesday, in addition to its nine scheduled flights between Rhodes and the UK.

Jet2 has cancelled all flights and holidays due to depart to the island in the next seven days, but aircraft with no customers on board will be flown there in order to bring people back.

British Airways said its flights to Rhodes were running as normal, but customers needing to return early could change their flight for free, and those not wishing to travel there in the next week from the UK could postpone their flight.

Tui has cancelled all its flights to the island until Wednesday, but customers currently in Rhodes will return on their intended flights home.

Source: BBC

WHAT NEXT FOR AIRLINES?

Airlines will have to play the ‘wait and see’ game over the next few days and hope that the wildfires on the Greek islands calm down and not escalate to other areas.

Now they can only focus on the rescue mission and issue refunds to customers as and when.

Danni Hewson, head of financial analysis at AJ Bell says: ‘Falling share prices for the likes of Jet2, EasyJet and TUI suggest investors are worried that they won’t achieve near-term earnings forecasts and they will potentially incur extra costs for having to run repatriation flights to bring customers home.

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‘This most recent episode is the latest in a string of problems for the airline sector. It already faces yet another summer of strike action, with European air traffic controllers and workers at Gatwick set to cause further disruption.’

Tour operator Thomas Cook has also cancelled some holidays to affected areas and offered full refunds to holidaymakers. The online travel agent also said that some customers who booked to travel to other parts of Greece on 24 and 25 July will be ‘contacted with the option to cancel and be refunded if they wished.’

Disclaimer: Financial services company AJ Bell referenced in the article owns Shares magazine. The author of the article (Sabuhi Gard) and the editor of the article (Steven Frazer) own shares in AJ Bell.

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