Airline shares slid after a report that Portugal had lost its UK green list status while there would be no new additions to the places people can visit quarantine-free.
British Airways owner IAG (LON:IAG), meanwhile, had been pleading with the government to include the US on the green list to reboot its lucrative business travel routes.
According to the BBC, however, Portugal will be downgraded to amber removing the one big UK tourist destination free from quarantine.
Holiday travel, in theory, resumed on 17 May but Israel, Iceland, Australia and New Zealand were the only other major holiday places on the green list and the Antipodean countries aren’t allowing UK visitors.
Southern Europe in July and August is a key holiday destination for the British and rather than further restrictions the airlines had been calling for a reduction in requirements such as PCR tests for places such as Spain and Greece.
If it is confirmed as amber-rated, visitors returning from Portugal will have to quarantine for ten days and take a Covid-19 test on days 2 and 8.
Spain, France, Italy and the United States are on the amber list but the reports today suggested more countries will be added to the red list, meaning anyone coming back to the UK will have to stay in a hotel and quarantine for almost two weeks.
Prime Minister Boris Johnson had warned that he would not hesitate to downgrade countries if that was the advice.
“I want you to know we will have no hesitation in moving countries from the green list to the amber list to the red list if we have to do so. The priority is to continue the vaccine rollout, to protect the people of this country,” he told reporters.
Shares in IAG dropped 5.5% to 197.8p, Ryanair 3.8% to €16.51 and easyJet 6% to 949p.