easyJet is set to rejoin the FTSE 100 after a prolonged period in London’s mid-cap FTSE 250.
easyjet shares have steadily ascended over the past year and are now almost 100% higher than the lows recorded in the midst of the pandemic.
The airline is one of many travel-related companies that have slowly but surely carved out a recovery from the pandemic and are in much stronger positions than they were in the immediate aftermath. That said, easyjet is yet to fully recover from the pandemic in terms of financial performance.
The same sentiments behind Rolls Royce meteoric recovery are at play in easyjet. The airline is enjoying a recovery in travel after the pandemic as pent up demand supports booking growth.
In addition, despite the cost of living crisis, undercurrents of a consumer more willing to spend disposable income on travel than consumer goods have created a favourable environment for EasyJet.
There will, of course, be concerns the economic malaise puts a stop to this, but for now, easyJet deserves its spot back in London’s leading index.
“While recovering pre-pandemic form is still proving highly elusive, easyJet’s continued progress has cheered investors, with shares up 9% year to date. The ‘revenge travel’ trend is still proving strong, with people still determined to see more of the world again after being cooped up at home during the Covid crisis,” said Susannah Streeter, head of money and markets, Hargreaves Lansdown.
“Consumers still appear to be ring-fencing chunks of disposal income to spend on airfares, seat upgrades and treats on board, with the desire to travel higher up wish-lists than home purchases like furniture and TVs. The company has shown particular prowess at selling extras to customers on flights, and that helped first quarter revenue jump 22%, with losses narrowing again. It’s also managed to largely ride out the turbulence caused by flight disruptions in the Middle East with summer bookings building well.”
