Will easyJet shares slump after UK adds France to quarantine list?
easyJet plans to operate a full flight schedule despite the UK government adding more countries to its quarantine list, with France and the Netherlands the latest to be added. But what does this mean for the easyJet share price?
easyJet said that it plans to operate a full flight schedule even though the UK government continues to add more countries to its Covid-19 quarantine list, which now includes France and the Netherlands.
The news will likely be welcomed by those looking to fly, but investors took a dim view of the decision, with the low-cost airline seeing its share price fall 7% on Friday.
‘We plan to operate our full schedule in the coming days. Customers who no longer wish to travel can transfer their flights without a change fee or receive a voucher for the value of the booking,’ an easyJet spokesperson said.
‘Should any flights be cancelled for later in August customers will be notified and informed of their options which includes transferring to an alternative flight free of charge, receiving a voucher or applying for a refund via a webform on our dedicated Covid Help Hub at easyJet.com.’
The UK government has already added Malta and Spain to its quarantine list which sees travellers forced to adhere to a 14-day self-isolation period when returning from holiday.
easyJet shares are trading at 566p per share at the time of publication, with the stock down 60% year-to-date.
easyJet shares could hit 600p, says Barclays
Despite the dip in share price on Friday, analysts at Barclays believe the stock will rebound, with the lender reiterating its ‘equal weight’ rating and issuing a target price of 600p per share in August.
The price target implies a potential upside for easyJet of 6%.
easyJet is looking to bring in as much cash over the summer holiday period, with the low-cost airline putting on a major sale and launching its summer 2021 sales earlier than ever before in an effort to capitalise on demand.
However, the real test for easyJet in the coming months will be if holidaymakers will be comfortable travelling to destinations on the ever-growing quarantine list and if passenger demand will wane due to fears of a second wave.
easyJet sees summer short-haul flights increase, lifting shares
easyJet’s Q3 performance earlier this month was in line with expectations, with the airline ending the period with a re-start to flying.
However, based on current travel restrictions, easyJet expects to fly around 40% of its planned capacity for the fourth quarter (Q4) 2020, with the airline forecast to record a smaller loss in Q4 than in Q3, however.
The low-cost airline raised its Q4 schedule to 40% capacity, up from its previous guidance of 30%, with the company’s return to the skies helping to lift its share price 32% in August.
If easyJet is able to meet its capacity targets for Q4, the stock could break through key resistance levels. But if Covid-19 cases surge and governments are forced to impose further travel restrictions, airline stocks will likely slump.
‘Returning to the skies again allows us to do what we do best and take our customers on much-needed holidays,’ easyJet CEO Johan Lundgren said.
‘Our bookings for the remainder of the summer are performing better than expected and as a result we have decided to expand our schedule over the fourth quarter to fly c.40% of capacity,’ he added.
‘This increased flying will allow us to connect even more customers to family or friends and to take the breaks they have worked hard for.’
How to trade stocks with IG
- Create an IG trading account or log in to your existing account
- Enter ‘easyJet’ in the search bar and select it
- Choose your position size
- Click on ‘buy’ or ‘sell’ in the deal ticket
- Confirm the trade
This information has been prepared by IG, a trading name of IG Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.
CFDs are a leveraged products. CFD trading may not be suitable for everyone and can result in losses that exceed your initial deposit, so please ensure that you fully understand the risks involved.
Act on share opportunities today
Go long or short on thousands of international stocks with CFDs.
- Get full exposure for a comparatively small deposit
- Trade on spreads from just 0.1%
- Get greater order book visibility with direct market access
See opportunity on a stock?
Try a risk-free trade in your demo account, and see whether you’re on to something.
- Log in to your demo
- Try a risk-free trade
- See whether your hunch pays off
See opportunity on a stock?
Don’t miss your chance – upgrade to a live account to take advantage.
- Trade a huge range of popular stocks
- Analyse and deal seamlessly on fast, intuitive charts
- See and react to breaking news in-platform
See opportunity on a stock?
Don’t miss your chance. Log in to take advantage while conditions prevail.
Live prices on most popular markets