Thursday, October 12, 2023 - The European airline industry is showing signs of recovery, with EasyJet's summer quarter revenue surge leading the way. Despite challenges such as rising fuel costs, airport charges, and inflation-driven salary increases, high ticket pricing is expected to yield strong quarterly results.
Airlines had anticipated robust summer travel demand and investors have been closely monitoring capacity development in anticipation of the year-end holiday season. UBS has projected a 13% year-on-year increase in Q4 European short-haul capacity, which is approaching the levels seen in 2019.
EasyJet is optimistic about its growth prospects, forecasting a 15% capacity growth in the current quarter due to sustained booking momentum. The company is also showing promising signs according to InvestingPro data, with a market cap of 7.07M USD and a dividend yield of 1.57%. The airline has also seen a 1-week price total return of 3.2%, which is a positive indicator for investors.
Factors such as supply-chain disruptions and Pratt & Whitney's jet engine recall have impacted parts procurement and aircraft deployment across the industry. Even with these challenges, EasyJet has been able to maintain a moderate level of debt, as per InvestingPro Tips, which can be seen as a positive sign for potential investors.
Deutsche Lufthansa (ETR:LHAG) expects its annual capacity to reach around 85% of 2019 levels due to bottlenecks in the air traffic system. As airlines are preparing for their earnings season, there are concerns about future price pressures and capacity comparisons to 2019. Despite these challenges, a "strong set of 3Q results" is anticipated across the industry.
Earnings report dates for several airlines including Finnair, Air France-KLM (LON:0LN7), Turkish Airlines, Deutsche Lufthansa, Ryanair (LON:0RYA) Holdings (NASDAQ:RYAAY), Wizz Air (LON:WIZZ) Holdings, Jet2, easyJet (LON:EZJ), and SAS have been announced. These reports will provide further insight into the state of the industry's recovery and its prospects moving forward.
According to InvestingPro Tips, analysts are optimistic about EasyJet's performance, expecting growth in net income and sales in the current year. The company has also seen a high return over the last year, further strengthening its position in the market. To gain more insights like these, consider checking out InvestingPro, which offers a total of 12 tips for EasyJet and other companies.
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