Skip to content

Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work, and whether you can afford to take the high risk of losing your money.
Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work, and whether you can afford to take the high risk of losing your money.

easyJet shares could soar when it rejoins IAG in the FTSE 100

The easyJet share price could soar as it rejoins the FTSE 100. But it faces rising costs of debt and oil combined with shaken consumer confidence as Russia invades Ukraine.

easyjet Source: Bloomberg

The easyJet (LON: EZJ) share price has been through significant turbulence over the past two years. Worth 1,270p in February 2020, the covid-19 pandemic crash saw it collapse to 400p by 3 April. By May 2021 it had recovered to 922p, before sinking to 500p towards the end of November.

Then it soared to 706p on 11 February. However, it's now fallen 5% today to 611p as Russia launches its invasion of Ukraine. But with a £4.9 billion market cap, FTSE Russell is likely to decide tomorrow to eject Cineworld and Dechra Pharmaceuticals from the FTSE 100 in favour of the resurgent airline stock. If it does, then easyJet will rejoin the UK's premier index in March.

easyJet share price: Q1 results

The airline's recent trading update gave off mixed signals for investors. Revenue for the three months to 31 December rose to £805 million, compared to £165 million a year earlier. Passenger revenue rose to £547 million, up £118 million year-over-year. And ancillary revenue per seat of £14.84 was nearly 50% higher than in the same period last year.

However, headline costs rose from £588 million to £1 billion, ‘primarily driven by the higher level of capacity flown compared to the same period last year (and) an increased number of standby crew is being held to proactively protect the operation.’ In a bullish sign, ‘easyJet was the most punctual large European airline in 2021…following a successful recruitment process and preparation for our summer ramp up, easyJet will welcome new crew into the business during Q2 to undertake their training.’

The company halved its headline loss from £423 million to £213 million in the quarter, while cash burn also halved from £969 million to £450 million. And while the airline’s net debt is at £1.2 billion, none of this debt matures until the 2023 financial year.

easyjet 2 Source: Bloomberg

Tailwinds, headwinds

Moreover, there are several strong tailwinds for the FTSE 100 airline stock. Most importantly, England has joined Denmark, Norway, and Sweden in lifting all covid restrictions. France has dropped the requirement for vaccinated travellers from the UK to take a pre-departure test, a decision which has been imitated by the European Council for all third-country travellers. easyJet has called the move a ‘welcome step closer towards restriction free travel across the whole of Europe.’

CEO Johan Lundgren believes ‘testing for travel across our network should soon become a thing of the past.’ The airline flew 64% of pre-pandemic capacity in the quarter, compared to 18% capacity a year earlier. And Lundgren forecasts ‘a strong summer ahead, with pent up demand that will see easyJet returning to near 2019 levels of capacity with UK beach and leisure routes performing particularly well.’ Its position as a short haulier could give it an advantage over long-haul carriers like IAG.

However, multiple factors could arrest the easyJet share price’s take-off. In common with IAG, it is contending with a worsening cost-of-living crisis. Tax rises and increased energy bills are coming in April. And the Bank of England could again raise the base rate from its current 0.5% to stave off rising inflation. This will make selling tickets to cash-strapped consumers harder, while simultaneously increasing easyJet’s debt burden. And with Brent Crude hovering near $100 a barrel, and rising, the airline has limited pricing options.

Of course, there’s also the impact of the Ukraine crisis to consider; many commercial airlines have already stopped flights to the country. As Ukraine's foreign minister accuses Russia of starting a full-scale war, airline monitor Safe Airspace has increased the country’s airspace risk level to ‘do not fly,’ saying ‘the level of tension and uncertainty in Ukraine is now extreme.’

Capital Economics analysts believe that the Ukraine crisis could see inflation spiking faster, forcing central banks to raise interest rates faster. They contend that ‘this geopolitical flare-up is likely to speed up the process of Russia's decoupling from the West.’

The potential implications for easyJet are clear. Its debt and oil will cost more, while consumer confidence will take a hit from a military crisis and heavily reduced disposable income. The airline may even be bumping up spending for a summer season that fizzles out before it begins.

Of course, a return to the FTSE 100 means the stock will once again be boosted by passive FTSE 100 index investors. But with the future so uncertain, the easyJet share price may be more volatile than volitant.

Go short and long with spread bets, CFDs and share dealing on 16,000+ shares with the UK’s No.1 platform.* Learn more about trading shares with us, or open an account to get started today.

* Best trading platform as awarded at the ADVFN International Financial Awards 2021

This information has been prepared by IG, a trading name of IG Markets 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. See full non-independent research disclaimer and quarterly summary.

Act on share opportunities today

Go long or short on thousands of international stocks with spread bets and 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
  • Take your position
  • 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

  • Equities
  • Indices
  • Forex
  • Commodities
website terms and agreements. Prices are indicative only. All share prices are delayed by at least 15 minutes.

" >


Prices above are subject to our website terms and agreements. Prices are indicative only. All share prices are delayed by at least 15 minutes.

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.

Plan your trading week

Get the week’s market-moving news sent directly to your inbox every Sunday. The Week Ahead gives you a full calendar of upcoming economic events, as well as commentary from our expert analysts on the key markets to watch.


For more info on how we might use your data, see our privacy notice and access policy and privacy webpage.

You might be interested in…

Find out what charges your trades could incur with our transparent fee structure.

Discover why so many clients choose us, and what makes us a world-leading provider of spread betting and CFDs.

Stay on top of upcoming market-moving events with our customisable economic calendar.