Shares in airlines, including Ryanair and Aer-Lingus-owner IAG, as well as travel giant TUI soared, as the threat of any disruption from Brexit was put off beyond the industry’s most profitable summer season.
The extension granted by EU leaders to the end of October for the UK to sort out its Brexit political crisis lifted the looming threat of major profit hit any shorter extension to the end of June may have entailed for the travel industry.
EasyJet shares soared 9% and travel giant TUI rose steeply by 8%, while shares in Ryanair and IAG, which also owns British Airways and Iberia, climbed by over 5.5%.
Airline shares have been under pressure in recent months from rising fuel costs but the Brexit extension at least removes one immediate threat to earnings for the time being.
Chris Beauchamp, chief market amalyst at online broker IG, said investors appear to be relieved that tourists won’t face lengthy passport delays this summer
Against the euro, sterling, which has long been a reliable measure of the threats of a hard Brexit or Britain crashing out of the EU, was little changed, at 86.17 pence.
Markets economist Oliver Jones at Capital Economics in London said sterling and betting markets indicated that the currency is “set for a period of uneasy calm, as things are not likely to become much clearer until the new Halloween deadline is looming”.
“Insofar as investors are positioned for anything, it seems to be further gridlock and can-kicking. Despite the extension until October, they still think that the single most likely outcome is that the UK has not left the EU,” he said.
In a joint statement, business groups Ibec in the Republic and the CBI in the North said that the October extension meant “an imminent economic crisis had been averted”.