Any hopes of a winter holiday boom that could make up for a dismal summer have been well and truly dashed.
British Airways-owner IAG is the latest airline to cut its upcoming flight schedule, citing the failure of governments to support airport testing and rising cases in many countries.
The resulting quarantines are putting holidaymakers off booking – and are also set to wreak havoc for airlines that let travellers rearrange their summer holidays for winter breaks.
Grounded: British Airways-owner IAG is the latest airline to cut its upcoming flight schedule, citing the failure of governments to support airport testing and rising cases in many countries
IAG has said BA and Spanish airlines Vueling and Iberia will run just 30 per cent of the flights they ran last year, down from its previous plans to operate at 40 per cent.
In a curtain-raiser before more detailed third-quarter results next week, the conglomerate reported it will make an operating loss of £1.2billion and miss its target for its cash flow to break even this year.
The losses are worse than the City had expected and will come on revenue of £1.1billion – in stark contrast to £6.6billion in the same period of 2019.
The third quarter was meant to be a rebound from a dire second quarter that encompassed the most stringent European lockdowns.
But passenger numbers were down by 78.6 per cent and the planes that did fly were less than 50 per cent full, which will mean many will have flown at a loss.
Stock Watch – Futura Medical
Futura Medical has made progress with gaining support from regulators for its erectile dysfunction gel.
Shares climbed 16.7 per cent, or 2.25p, to 15.75p after it said it is working with US authorities to conduct another clinical trial with around 100 patients using the gel at home rather than a lab for six months.
It is also in talks with a ‘growing number’ of potential partners, who are keen to license and market the over-the-counter treatment that works more quickly than tablets.
The market met the figures warmly, however, perhaps buoyed by its plan to cut back flights in a move that will protect its cash reserves. Shares rose 4.4 per cent, or 4.4p, to 104.85p.
Pest controller Rentokil was also among the rises in the FTSE 100.
It is planning to go on a takeover spree and buy small competitors after demand for its cleaning services surged in the third quarter.
Rentokil is expecting to spend £100million in the second half of its financial year in total on the acquisition binge, with chief executive Andy Ransom saying the group is ‘hopeful’ its core customer base will still need its services for the rest of the year.
Shares rose 3.9 per cent, or 20.2p, to 537.2p, helping nudge the FTSE 100 up 0.2 per cent, or 9.15 points, to 5785.65. The FTSE 250 was also up, by 0.6 per cent, or 106.6 points, to 17894.42.
Oil major BP recovered after hitting a 26-year low on Wednesday, although during the day yesterday it did fall below 200p for the first time since 1994 as investors fretted about the impact of a falling need for oil.
Eventually shares closed up 0.7 per cent, or 1.44p, at 201.4p.
Publishing and conference group Relx was down 1 per cent, or 16.5p, to 1636.5p after reporting the revenue from its business events arm had slumped 70 per cent so far this year compared with 2019.
Mid-cap gold miner Petropavlovsk was thrown into yet more turmoil – with shares falling 4.7 per cent, or 1.35p, to 27.55p – as it emerged Russian prosecutors are investigating a criminal case against its interim chief executive, Maksim Meshcheryakov.
It is understood to relate to an incident in August where Meshcheryakov and unidentified others forced their way into the company’s Russian headquarters following a stand-off with staff.
Car dealer Pendragon was one of the stand-out performers of the day after it made the equivalent of virtually all its half-year losses in a single quarter.
It shot up 22.6 per cent, or 2.4p, to 13p after raking in profits of £27million in the three months to September, following losses of £31million between January and June.
It put this down to a wide-ranging shake-up that included shutting underperforming stores.
Beleaguered cinema chain Cineworld took another tumble following media reports it has drafted in a team of City advisers to look at restructuring its humongous £6.1billion debt pile. Shares sank 9.2 per cent, or 2.98p, to 29.42p.