Financial News
TUI stock price plunges 15% as UK orders Spain quarantine
Shares of TUI AG (LON: TUI) have plunged 15% after the UK introduced a quarantine rule for all non-essential travel to Spain. As a result, shares tumbled below GBX300 to hit a 2-month low.
Fundamental analysis: Government decision sends shock waves through travel industryOn Saturday, the UK Government abruptly introduced a quarantine rule for all non-essential travel to Spain. As a result, all people coming from Spain will isolate for 14 days to “limit any potential spread to the UK”.
The decision forced TUI to cancel Sunday’s (July 26) flights to Spain. Moreover, the UK’s biggest tour operator will cancel all holidays to mainland Spain “up to and including Sunday 9 August 2020.”
“We will proactively contact all customers to either arrange a full refund or the option to rebook their holiday with a booking incentive. All customers currently on holiday can continue to enjoy their holiday and will return on their intended flight home,” the firm said in a statement.
All travel and holiday stocks turned lower on Monday after the latest decision from the UK government. Spain, and its popular summer resorts Ibiza and Palma de Mallorca, are one of the most popular summer destinations for Britons.
“We also look to understand why quarantine has been issued for a whole country, including the Canary Islands and Balearic Islands, when the travel advice isn’t aligned (only applying to mainland Spain). It demonstrates why clear regional travel corridors need to be considered,” TUI’s statement reads.
Travel and leisure stocks may take another hit as media reports that the UK government may extend its quarantine rule to Germany and France.
“A huge financial impact to us as business but not the worry many agents will have today with customers due to travel,” Lee Hunt, managing director of Deben Travel.
Technical analysis: TUI share price tumblesAfter closing the last week of 6.5% in the red, TUI stock price continued in the same direction on Monday. Shares plunged as much as 15% on the UK government’s decision to trade at GBX287.9. This is a new 2-month for the stock.
TUI stock weekly chart (TradingView) If the quarantine rule is not axed, we may see TUI share price head towards March lows in the low GBX200s. The intraweekly resistance is located at GBX350.
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SummaryTUI stock price crashed 15% to trade below GBX300 once again after the UK introduced a quarantine rule for all non-essential travel to Spain in another major blow for British holidaymakers.
The post TUI stock price plunges 15% as UK orders Spain quarantine appeared first on Invezz.
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