With Monarch going into administration and Ryanair still waging a battle with its pilots over crew shortages, Easyjet’s upbeat trading update should have been welcome news for markets.
However, the airline’s shares slid as low as 3% to £12.45p on Friday morning, reflecting outstanding jitters about the UK’s biggest airline brands.
The preamble to its full year results, to be published on 21 November, pointed to record passenger numbers and forecasted profits between £405m to £410m, despite taking a £100m hit from adverse foreign exchange movements.
The budget airline drew 24.1 million passengers in the three months ending 30 September thanks to low summer fares, leading to a record load factor of 95.6%.
It also managed to grow capacity by 8% year-on-year, with chief executive Carolyn McCall targeting further capacity growth of 6% for 2018.
Despite noting a “challenging” market, McCall said “Easyjet continues to operate Europe’s strongest network”, adding that “the current turmoil in the sector provides Easyjet with opportunities to capitalise on its strong customer proposition and grow and strengthen our positions in Europe’s leading airports still further”.
Ian Forrest, investment research analyst at The Share Centre, retained his ‘hold’ recommendation for the airline’s stock, referencing the company’s confidence in its business model and “relatively strong balance sheet”.
“The weakness of sterling, fierce competition and uncertainty over future leadership mean the shares are no better than a hold. We prefer International Consolidated Airlines, the owner of British Airways, in the sector.”
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Meanwhile, Europe awoke on Friday to news that the S&P 500 had hit its sixth consecutive closing high on Thursday, ahead of Friday’s non-farm payroll figures.
The index closed 0.6% up at 2,552.07, with online streaming service Netflix and the producer of Corona and Pacifico beers, Constellation Brands, reporting the biggest gains on the day of 5.4% and 4% respectively.
