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Are there better times on the horizon for easyJet?


easyJet last week posted a loss before tax of £272m in its half year results, compared to a loss of £68m the same time last year.

Brexit and increased fuel costs have been to blame for many airlines but pushing ahead despite these headwinds is the only viable option.

Laura Beaton, Travel & Tourism analyst at GlobalData, gives her thoughts on the easyJet business:

“Brexit is obviously a huge threat to the airline industry but with the uncertainty only continuing, easyJet cannot afford to dwell on it. Instead, the company has to focus on improving its own service and image. According to the 2019 annual ratings from AirHelp, EasyJet was ranked the second worst airline in the world, after Thomas Cook. While it is slightly unfair to compare Full Service Carriers with Low Cost Carriers as they offer a completely different service, easyJet really needs to reassess and think how it can make improvements.

“easyJet was shown to have just a 67% on-time performance, admittedly much better than Thomas Cook’s 57% but only a slight improvement on Ryanair’s 65%. Delayed flights cause major dissatisfaction, especially for Low Cost Carriers as there is not much else in terms of offerings to make up for the inconvenience.

“However, the half year report shows the passenger numbers for the six months to March 2019 increased by 4.9 million passengers (13.3%) so demand is still increasing despite Brexit. The recent addition of five new routes from Bristol to destinations in Greece, France, and Italy is a step in the right direction. Hubs outside of London can benefit the rest of the country too, especially as short domestic hops are frequent for the company.

“The company has already attempted to protect itself from the adverse effects of Brexit with EasyJet Europe, which has its headquarters in Vienna so the group is now a pan-European airline group with three airlines based in Austria, Switzerland and the UK.”

Barclays Capital has today reaffirmed its underweight investment rating on easyJet shares and cut its price target to 1100p, down from 1130p. The easyJet share price is currently at 986.20p

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This article does not constitute investment advice. Do your own research or consult a professional advisor.

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