UK travel stocks fell on Monday morning in London even as the US opened its borders to UK flights for the first time in nearly two years.
Gloom spread through stocks in the sector, with even airlines that do not fly to the US heading lower.
British Airlines owner IAG (IAG.L) fell 1.5% in early trade in London, having rallied on Friday in anticipation of the reopened travel path. Budget airlines Ryanair (RYA.L) and easyJet (EZJ.L) were also down 1% and 1.4% respectively.
The border reopened at 5.01am GMT, with the first flights departing from Heathrow at 8.30am. UK visitors over the age of 18 will have to show proof of vaccination at the border.
The US has now lifted Trump-era restrictions that effectively halted tourism and non-essential travel from 33 countries, including the UK, most of Europe and China.
Travel stocks had rallied last week following news that a new pill in development with Pfizer (PFE) had reduced COVID-19 hospitalisations and deaths substantially.
The drug is the second promising candidate for the treatment of COVID patients, following Merck's effort. Investors were optimistic it would encourage the return of international travel, which was grounded for the best part of a year during the worst of the pandemic.
Friday was the best day for airline stocks since November 2020, with gains of around 7%. On the day, shares of cruise companies headed higher as well.
Virgin Atlantic, one of the main airlines that flies between the UK and US, said that bookings had surged 600% since he announcement was made. The majority of the bookings were for New York, the airline said.
Delta Airlines (DAL) CEO Ed Bastian also predicted an "onslaught of travel" with queues likely at airports amid the rush in November.
Hotel prices in New York are also returning to pre-pandemic levels as bookings surge.
Watch: Tourism industry welcomes easing of US travel restrictions