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.
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