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THE challenges of the pandemic have just worsened for the travel industry, with the sector thrown into fresh chaos after restrictions were imposed overnight following the discovery of a worrying new covid variant. The UK’s decision to impose travel restrictions on six African countries immediately sent airline shares plummeting.

It is the worst possible news for companies like easyJet (EZJ), that make their money flying travellers around the world.

As easyJet, Ryanair and British Airways-owner IAG saw sharp falls in their share prices, those brief moments when it felt like life was returning to normal - back in the summer of 2020, and more recently in the summer just gone, when passenger numbers returned to near normal levels over the busiest weeks - suddenly felt like a lifetime ago. The latest travel restrictions, as the travel sector should be gearing up for the busy festive period, is a reminder that those moments of near-normality have been but brief stops in this long haul pandemic.

The International Air Transport Association has gone on record to say 2020 was the very worst year in history in terms of passenger demand, but as we draw ever closer to the end of 2021, it doesn’t feel like this year has necessarily fared any better.

Things are far from normal yet. EasyJet the low-cost carrier knows that. Its net debt may have reduced significantly, from around £2 billion to about £900 million in the past quarter, but that’s following a £1.2 billion rights issue. And it’s expecting a headline loss before tax for the year to the end of September 2021 of between £1,135 million and £1,175 million, compared to a consensus forecast of £1,175 million.

And nothing can be taken for granted right now. Wizz Air looked to have been in good company alongside the likes of Lufthansa and Ryanair in turning its first profitable quarter since the start of the pandemic, but that came with a warning that it would be plunged back into losses this winter. The airline said it would have to cut ticket prices to encourage people to fly this winter; a move which would be likely to push it back into the red. There are other potential bright spots.

Several tour operators including Tui, Europe’s largest, have said that reservations for holidays in summer 2022 have already beaten the level of bookings at the equivalent point in 2019. And the reopening of transatlantic air routes for vaccinated passengers to travel freely between the US and 33 countries, including the UK and most of Europe, after 18 months of disruption, has to be a sign of better times ahead.

One lingering issue - among a list of plenty of others, admittedly - is customer reticence. EasyJet says customers are now booking closer to departure. That makes planning and forecasting tricky. However, it says capacity in the first quarter of 2022 is now expected to be up to 70% of 2019 levels.

If, and it’s a big if with covid cases rising across Europe and countries going back into lockdown, customers do return for summer 2022 and beyond, then easyJet and co can breathe more easily. But we’re still some way off reaching destination post-pandemic just yet.

EasyJet’s full year results are out on Tuesday.

More on easyJet

Important information: Reference to specific securities should not be construed as a recommendation to buy or sell these securities and is included for the purposes of illustration only. When you are thinking about investing in shares, it’s generally a good idea to consider holding them alongside other investments in a diversified portfolio of assets. Investors should note that the views expressed may no longer be current and may have already been acted upon. This information is not a personal recommendation for any particular investment. If you are unsure about the suitability of an investment you should speak to one of Fidelity’s advisers or an authorised financial adviser of your choice.

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