EasyJet share price: what’s the outlook after FTSE 100 relegation?
Last week, the low-cost airline nosedived out of the blue-chip index after a market reshuffle, but the turbulence its experience may be short-lived.
easyJet fell out of the FTSE 100 during its quarterly reshuffle last week after the low-cost airline’s share price slid to a five-year low to £8.46 a share.
But despite easyJet being dropped out of the blue-chip benchmark, the airline could see it returning to bluer skies and back to the top flight relatively soon, with the stock did rebound in the days that followed, sitting at £9.21 on Wednesday morning.
European airlines hit turbulence
The factors that brought about easyJet’s descent out of the FTSE 100 are not unique to the carrier, with many of its rivals like Ryanair all being hit by turbulent market conditions.
The airline industry continues to struggle with a cocktail of headwinds including rising fuel prices, fierce competition to keep fares low and ongoing political and economic uncertainty caused by Brexit.
Outlook unclear for easyJet
with the summer season underway, the second half of trading should bring a boost to easyJet’s performance, with the airline keeping its headline profit forecast for 2019 unchanged and in line with market expectations.
‘We are well-equipped to succeed in this more difficult market through a number of short-term customer and trading initiatives for the summer; measures to improve our operational resilience; and by focusing on what is most important to customers – value for money, punctuality and great customer service,’ easyJet CEO Johan Lundgren said.
Cost-cutting will have to remain a priority for the low-cost airline through the remainder of the year if it plans on flying back into the FTSE 100, with the business on track to deliver more than £100 million in savings this year.
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.
Live prices on most popular markets
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.