Airlines shares were among the best performers as the sector rallied on good news on several fronts.
British Airways and Virgin were among those to announce that facemasks are no longer required to be worn by passengers following the lifting of all travel restrictions by the UK government.
Travellers with IAG-owned BA will now only have to wear a face if it is required by the county they are visiting, while Virgin said compulsory rules would start to be relaxed from tomorrow.
Transport Secretary Grant Shapps said the changes would come in time for Easter and meant people ‘can travel just like in the good old days'.
A raft of upgrades from three US airlines also boosted the mood among investors and the notion that a recovery for the carriers might finally be underway after the ravages of the Covid pandemic.
Delta Air Lines (NYSE:DAL), United Airlines and Southwest Airlines (NYSE:LUV) all said demand for air travel was strong and helping to offset higher fuel costs.
Delta upped its forecast for first-quarter adjusted revenue to about 78% of its pre-pandemic level, compared with 72% to 76%previously.
Southwest said it was expecting revenue to fall 8% to 10% against a previous estimate of a 10% to 15% fall, while United said the drop in its first-quarter operating revenue would be at the "better" end of its forecast 20% and 25% drop from pre-pandemic levels.
The airline did cut its full-year capacity forecast due to rising fuel prices and aircraft delivery delays and analysts said it was now fuel costs rather than bookings that were the main headaches for the airline sector.
In a note today on British Airways owner IAG, Berenberg said bookings had recovered faster than expected but the Russia-Ukraine war and but fuel costs were threatening its forecasts.
“International bookings (long and short-haul) were running above 80% of 2019 levels in late February as Omicron fears began to subside, a speedier rebound than we would have anticipated.”
It said the airline's direct exposure to Russia was also limited.
"IAG’s scheduled capacity exposure to Russia-Ukraine was just c0.5% in 2019A, while its Atlantic focus (48% of FY 2019A traffic, versus peers at 38%) over Asia-Pacific (8% of FY 2019A traffic versus peers at 23%) leaves its long-haul business less vulnerable to the conflict.
“Should the war not spread beyond Ukraine, fuel will remain the greatest threat to the group’s recovery.”
Even so, IAG shares rose 1.9% to 139.6p, though this was the worst performance among the UK-listed sector with easyJet up 5.5% at 534p and Jet2 up 2.6%. Dublin-listed Ryanair rose 3.9% to 1,193p.
Even central-Europe based Wizz Air eked out a small gain.