The European Union states have agreed to allow vaccinated tourists to enter the bloc, with no details yet on what vaccines would be accepted for entry. 

If it remains up to the individual member states to decide which specific vaccines to accept, VTBC Capital (VTBC) argues on May 20 that the top three EU destinations, Germany, Italy and Spain, as well as Greece, are the first candidates for opening to Russia, "as they have all spoken positively about Russian tourists and vaccines."

This would be the good news for Russian national air carrier Aeroflot, as these four nations contributed some 20% to Russian international traffic before coronavirus (COVID-19).

As reported by bne IntelliNews, Russian air travel traffic has been one of the fastest to recover globally due to the strong performance of the domestic market. But the outlook for Aeroflot hinges on the speed of recovery of high-margin international flights.

In an additional boost, should the European Medicines Agency (EMA) approve Russia’s Sputnik V during the summer, this would also make Russian vaccinated tourists eligible to enter.

"Given the airline has among the strongest fundamentals globally, positive sentiment from opening borders might be a trigger for a rerating, ending the stock’s period of underperformance, in our view," VTBC wrote, while affirming a Buy rating on Aeroflot's shares.

In addition to direct support from international traffic, opening of the European destinations would relieve Aeroflot as it starts to draw on its $1.3bn leasing deal with Airbus, getting long-haul jets delivered to Aeroflot while the restrictions on international flights still persist.

Most recently, Aeroflot gave a cautious guidance for 2021 following the publication of its 2020 IFRS results. As for the high season of 2021, Aeroflot anticipated a robust performance for domestic flights, while the outlook for international flights is far less optimistic, as there are no clear signs yet of a significant recovery.