Zhitong Finance observed that European aviation stocks, which had been hit hard by the epidemic, were gaining new vitality thanks to the relaxation of travel restrictions in the US and the UK.

It is reported that the White House said earlier that the United States would open its borders to vaccinated foreigners, and Britain also relaxed novel coronavirus testing requirements for fully vaccinated immigrants. In the past two weeks, ICAGY.US, the parent company of British Airways (British Airways), has become the focus of the market, with its share price soaring 21%; Air France-KLM Group (AFLYY)Shares of low-cost airlines such as .US, Air France-KLM), DLAKY.US,Deutsche Lufthansa AG and RYAAY.US,Ryanair Holdings Plc also performed strongly.

The relaxation of travel rules in the United States has led to a surge in bookings from Europe to the United States, with Air France and KLM reporting a surge in bookings for Christmas. And Goldman Sachs Group(Goldman Sachs) upgraded Lufthansa.

While analysts have been slow to raise their forecasts for airlines, the consensus is rising. Data compiled by the media show that the aviation industry is likely to be profitable again in about a year.

Other areas of tourism are also showing signs of improvement. TUI AG (TUIFY.US), the travel operator, rose 10 per cent in three days after the UK said it would lower testing requirements and simplify country risk rankings. Share prices of several companies, including reservation software provider Amadeus IT Group SA (AMADY.US), airport retailer WH Smith Plc and ACCYY.US,Accor SA, have rebounded recently, although they are still well below pre-epidemic levels.

Can airline stocks continue to rise?

As the airline industry has been lagging behind for a long time, investors are divided over whether the rally in aviation stocks can be sustained. The share prices of European airlines are still about 25 per cent below their pre-epidemic levels, lagging behind industries such as industry and retail, where share prices are 30 per cent higher than before the outbreak.

While the possibility of new outbreak restrictions is a continuing risk, the current reopening of air travel may be the catalyst they need to achieve a more lasting recovery.

Alan Custis, head of UK equities at Lazard Asset Management, said investors should take so-called reopened industries such as tourism "very seriously". "people might say that opportunities in these sectors may be much better now than in the absence of an epidemic". He pointed out that excess capacity in airplanes, hotels and restaurants had been eliminated and "earth-shaking changes have taken place".

Mamta Valechha, an analyst at Quilter Cheviot, an asset management firm that manages about 25 billion pounds ($34 billion) of assets, takes a similarly positive stance. "We do continue to be bullish on the value of tourism, especially airlines, which have been hit hardest and are still a long way from their 2020 peak," Mamta Valechha said.

However, investors may need to be patient. "Travel stocks will be the hot spot next year," said Alasdair McKinnon, chief manager of Scottish Investment Trust Plc. As the main holiday season has passed, from the perspective of leisure tourism, this year's opportunity has passed. "

Mamta Valechha also says the shift to working from home still has a knock-on effect on travel revenue. She estimates that business travelers account for 30% to 60% of airline revenue. "given the advances in remote commerce technology, there is still a lot of uncertainty about when business travel will resume."

Risks in the process of recovery

Hannah Gooch-Peters, an equity investment analyst at investment firm Sanlam UK, said the rebound in the epidemic at major Asian destinations also posed risks for companies such as London-listed Continental Hotel (IHG.US,InterContinental Hotels Group Plc).

The company has about £4.9 billion under management and holds tourism stocks such as Continental Hotel, but reduced its exposure in February. "the valuations of these companies don't look so attractive." "what we need is a globally synchronized recovery so that these stocks can really grow significantly," Hannah Gooch-Peters said.

Gavin Launder, a fund manager at Legal & General Investment Management, believes that investors who follow aviation stocks must believe that the next wave of reopening will not be thwarted again. "I think it's obvious that people want to travel," he said. So, at some point in the future, this will be a good deal. But we need to be confident that this reopening will not be a wrong start. "