Shares in airlines and holiday companies including EasyJet (EZJ), Jet2 (JET2:AIM), TUI (TUI) and International Consolidated Airlines (IAG) suffered losses on 24 July as wildfires took hold in the popular Greek holiday destinations of Corfu and Rhodes and a ‘extreme fire risk’ warning was made for Crete.

Danni Hewson, head of financial analysis at AJ Bell, said: ‘Falling share prices for the likes of Jet2, EasyJet and TUI suggest investors are worried that they won’t achieve near-term earnings forecasts and they will potentially incur extra costs for having to run repatriation flights to bring customers home.’

As a result of these wildfires some airlines had to cancel flights to certain Greek islands and begin a holidaymakers’ rescue mission instead. Jet2 and TUI have cancelled all flights to Rhodes until 28 July, while approximately 2,500 people have already been evacuated from Corfu, according to reports.

EasyJet cancelled package holidays departing for Rhodes between 23 and 25 July, while those who were booked on its flights to or from the Greek island up to 29 July were given the option to stick with their plans as it continued to fly to the destination, transfer to a different date or get a credit voucher from the airline.

Compounding the situation is the threat of strike action across the summer. European air traffic control workers are protesting at being short-staffed, management behaviour and an imposed roster system. EasyJet has already cancelled 1,700 summer flights as a pre-emptive measure, while also scrapping 350 flights earlier in July as cabin staff in Portugal held strikes over pay and working conditions.

The first phase of strike action by ground handling staff at London’s Gatwick airport this summer looks to have been averted but the second phase could still go ahead in August.

Back in April, EasyJet raised its full year profit forecast and said its holidays were 80% sold for summer 2023 despite higher fuel and operating costs.

In early July, Jet2 reported a 48% rise in group pre-tax profit of £390.8 million for the year ending 31 March 2023, compared to a £376.2 million loss a year earlier.

Airlines will have to adopt a ‘wait and see’ approach regarding how the Greek wildfire disaster pans out for holidaymakers and future bookings.

‘Reports of holidaymakers having to leave hotels and sleep in sports halls or on the street could cause others to think twice about booking last-minute breaks, for fear they too could get caught up in the chaos,’ added Hewson.

DISCLAIMER: AJ Bell is the owner of Shares magazine. The author (Sabuhi Gard) and editor (Daniel Coatsworth) own shares in AJ Bell.

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