By Samuel Indyk
Investing.com – Shares in UK based airlines were trading higher on Monday after a positive trading update from Ryanair (LON:RYA) lifted the sector, alongside a decline in Covid cases in the UK.
Ryanair results
Revenue almost tripled in the quarter to 30th June to EUR 371 million, as passenger numbers increased to 8.1 million, from virtually nothing in the same period last year.
The company also upped the lower end of its guidance for passenger numbers flown for the full year. The airline expects to fly 90-100 million passengers this year versus previous expectations of 80-100 million.
“Ryanair’s results painted a rosy picture of the future for European air travel as vaccination passports open the door to a summer travel season,” said Hargreaves Lansdown (LON:HRGV) Equity Analyst Laura Hoy in an emailed note.
“The group’s seen bookings rise since the new rules waving quarantine for double-jabbed travellers were announced and expects to fly 9m people in July and a further 10m in August. This is still below pre-Covid levels, but a huge improvement on the past year.”
At 11:30BST, Ryanair shares were trading higher by 4.1% at 16.38 pence per share.
Other UK-listed airlines were also trading higher. EasyJet (LON:EZJ) was trading higher by 4%, British Airways parent IAG (LON:ICAG) was up 3.3% and Wizz Air (LON:WIZZ) was up 1.9%.
Covid cases declining
The sector has also benefitted from falling Covid cases, particularly in the United Kingdom.
Over the last seven days, the UK has recorded a 15% drop in people testing positive for the Coronavirus. Last week some epidemiologists were predicting that the number of cases was going to keep increasing.
Imperial College Professor Neil Ferguson, who had been advising the government at the beginning of the pandemic, said it was “almost inevitable” the UK would hit 100,000 cases per day.
The 7-day average number of daily cases stands around 32,000, down from around 45,000 the week previously.
It is not exactly clear what has caused the drop off in cases. Some have cited the school closures for the summer holidays, meaning fewer tests have been conducted, but while cases are down over 15%, testing is down just under 5% during the week.
Others have cited the unusually warm weather, meaning people were more likely to meet outside. The Euro 2020 tournament also led to people meeting up in pubs and homes to watch the football while thousands descended on Wembley to watch the semi-finals and final.
Public Health England data showed around 10,000 more men aged 20-29 than women in the same age group tested positive for coronavirus in the week heading into England’s final with Italy.
However, while cases are falling, the prospect of some countries relaxing their restrictions on UK travellers increases, especially for those fully vaccinated against the coronavirus.
Italy is one of the major tourist destinations that still requires UK passengers to self-isolate when they arrive, however, they are scheduled to update their guidance this week as current restrictions end on 30th July.