EasyJet – Where to Next?

EasyJet shares have stalled over recent months, but with its preliminary full-year trading update on the horizon, investors will be hoping for a further recovery as airlines continue to bounce back from their pandemic woes.

The budget airlines shares have declined 8.5% over the last 6 months, despite a strong Q3 update and positive outlook to the end of the year.

Its Q3 results back in July saw the airline deliver a record profit before tax of £49m, up from £16m in the prior year. Passenger numbers grew 7%, load factor increased by 2ppts, and the group stated that EasyJet Holidays was on course to deliver £100m+ PBT in FY23.

EasyJet has reported consistent profits in 2023, and momentum is expected to continue into Q4. Johan Lundgren, CEO of EasyJet, previously stated that he expects the airline to deliver another quarter of “record PBT.” Capacity is anticipated to reach 29m in Q4, and booking momentum is expected to continue into Q1 FY24.

However, EasyJet has faced some turbulence over recent months. A familiar theme of airport disruptions, including staff shortages and flight delays/cancellations, have impacted the industry once again, causing issues for customers.

Additionally, EasyJet has been hit by higher oil prices and slightly weaker consumer sentiment. Despite the issues, airlines have, so far, been able to navigate through them. Even so, any comments regarding fuel prices and updates looking towards FY24 will need to be watched closely by traders/investors.

By Jamel Boughedda