MARKET REPORT: Airlines dive after Gatwick set for summer of strikes

Airline stocks took a dive yesterday after it was announced airport staff will strike over the peak summer holiday period at Gatwick.

Plans for more than 1,000 employees to walk out for four days from July 28 and again for four days from August 4 have thrown many Britons’ summer getaways into jeopardy.

Workers to go on strike include baggage handlers and check-in staff, with the Unite union saying action will ‘inevitably’ disrupt flights at the busiest time of year.

It is another blow for the industry after budget airline Easyjet cancelled more than 1,700 summer flights from Gatwick this week, affecting around 180,000 passengers. The airport has blamed restrictions on air traffic.

Fears of dashed holiday hopes dragged the price of multiple airlines down yesterday.

Going nowhere: Fears of dashed holiday hopes dragged the price of multiple airlines down

Shares in Easyjet fell 3.8 per cent, or 18.1p, to 477.8p while rival budget airline Wizz Air was down 3.4 per cent, or 95p, to 2676p. Investors will be keeping an ear out for whether Easyjet has anything to say about potential turbulence this summer when it updates shareholders next week.

It is expected to post higher sales for its third quarter to June next Thursday, on the back of a booking frenzy for the summer earlier this year.

British Airways owner International Consolidated Airlines also dipped before recovering a little and were down by 0.9 per cent, or 1.4p, to 154.65p while travel operator and airline Tui was also down 1.9 per cent, or 11.5p, to 585p.

But Jet2 bucked the trend with shares soaring by 3.6 per cent, or 42p, to 1197p, continuing a rally of almost 45 per cent over the past year. The FTSE 100 closed down 0.08pc, or 5.64 points, at 7434.57 points after hitting a high of 7480 that was quickly wiped out when trading started in Wall Street.

Eyes in the City will now be on an update on the headline inflation rate next week.

British manufacturer Spirax-Sarco Engineering was boosted by an upgrade from broker UBS to ‘buy’ from ‘neutral’ as it increased the target price to 12,400p from 11,560p.

A note to investors said: ‘We now see the shares as presenting an attractive entry point.’

Shares in the Cheltenham-based business increased 3.1 per cent, or 315p, to 10,455p. The increase is a good sign for investors because the stock price has dropped 11.44 per cent over the past six months.

Shares in Covid-vaccine maker AstraZeneca dipped 0.1 per cent, or 6p, to 10,324p despite HSBC identifying it among a slew of biopharma stocks set for growth.

The bank said the Cambridge-based pharmaceutical company would see growth thanks to drugs that are supported by strong clinical data.

HSBC added: ‘The inflationary pressures in most of the world and political will to control drug prices are leading to the regulatory pendulum swinging against the industry.’

It comes after the shares have slumped 8.8 per cent this month after a subdued reaction to trial results for a drug that aims to slow the progression of lung cancer.

A sea of red swept over telecommunications giants Nokia and Ericsson after they both posted disappointing financial updates.

Nokia slashed its annual sales forecast as customers pared back spending due to higher bills, sending shares down 9.4 per cent.

Ericsson posted a dramatic fall in its quarterly profits, with a 62 per cent drop for the three months ending in June, slightly beating market expectations. The shares were down 10.6 per cent.

Vodafone was also busy early on but the shares rallied to climb 0.4 per cent, or 0.27p, to 72.20p.