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Ok, first let's get through the BoE decision (which will be hold, and cut in a month). Given the keen interest in pushing this (and all airlines) down to make advantage of the bad macro situation (middle east mostly), this will go back to the lows around Q3 earning. Then there will be the slow and then sudden rise as the vampires that run the market (and with fear and low volumes, this is so easy) want their bonus for year end (yes, the same people pushing this down at the moment). Then, finally, value (mostly in EZJ) will rise through.

This is my prediction.

BTW, this would be the same game that was played in the last two years.

Christmas wish, please EZJ list somewhere else than LSE, so we can get rid of this rubbish, and get an instant +10% on announcement

Wizz -17%, algos probably doing the rest

Agreed.

The problem here is how long will it take for "analysts at Bernstein" (aka the market) who, BTW, have a TP for £5.25, to get it...

EZJ is the standout performer in this market, with the right strategy, the right customers, the holiday business growing and no nebt.

From the FT today: "Airlines brace for the end of the ‘revenge travel’ boom"

"EasyJet’s performance [vs Ryanair] raised “more questions than it answers: a gap of this magnitude between Europe’s two largest point-to-point airlines is unusual,” analysts at Bernstein said."

"Cracks have largely come in the short-haul market in Europe and the US, and in economy class, with longer trips and more expensive flights in business or first-class less affected. Airlines remain confident that demand for travel is still strong enough to keep air fares well above 2019 levels and sustain earnings."

It seems people that need to be careful with expenses are cutting, while more wealthy consumers are less affected. Remember the K recovery since covid?

Also: analysts at Bernstein should probably find another job.

I do not know how the mearket will react. I know how I will react.

Fantastic results in this environment.

Meanwhile Ryanair -18%...

Going through the May results, you get this:

"Bookings continue to progress in line with expectations, with Q3’24 currently c.77% of the program sold, +1 ppt

year-on-year and Q4’24 is c.39% sold, +1 ppt year-on-year. easyJet holidays has currently sold 77% of the plan for

this summer."

So, if they already sold 77% of Q3 (and 77% of holidays for whole summer), they would have already known if prices were softening significantly, so to clearly claim strong earnings growth would be very weird.

Based on this information, my view would be of a stupid market reaction and I'd like to add. This would then also force clear divergence between EZJ and RY SP, which have moved in tandem recently.

But it's difficult when there is so much turbulence (though in theory the best time to buy...). We'll see in a couple of days.

It's impressive to see they increases customers by 10%, load factors only 1% lower, but fares -15% and OpCosts 11% up.

Looking at the massive Ryanair's miss for Q1, I struggle to imagine how much of this was already priced in the 20% SP decline since April, but it is difficult not to think significant more pain coming for the industry.

I know EZJ is not Ryanair, but...

Agian from the Guardian:

UK and EU holidaymakers who have their flights delayed because of the IT outage are likely to find that they cannot claim compensation from their airline because the problem is out of its control, writes our consumer & Money editor Hilary Osborne.

EU rules, adopted by the UK, say that passengers can get compensation of up to £520 if their flight is cancelled or delayed by more than three hours - but not when the cause is an “extraordinary circumstance.”

Airlines are likely to argue that the outage counts as such - and some are already stressing in communications that the problems are not their fault.

Passengers who have travel insurance might be able to make a claim on their policy - but it will depend on the terms and conditions of the policy they have bought.

The world will survive...

From the Guardian:

A spokeswoman for easyJet, the UK’s biggest airline by passenger numbers, advised customers travelling from Spanish airports to arrive three hours before their flight due to the IT outage. She said:

EasyJet’s IT systems have not been directly affected by the Microsoft systems issues this morning, however we are aware that some airports’ systems have been impacted across Europe.

This has led to some disruption to flights this morning and we expect some further potential impact to flights today.

Customers should expect longer than usual airport queues and we are advising customers travelling from Spanish airports to arrive three hours before their flight. We advise customers due to travel with us today to continue to check the latest updates on their flight on easyJet’s Flight Tracker before making their way to the airport. Although outside of our control, we are sorry for any inconvenience caused.

Absolutely. Whatever caused this fall is not (long term) investors asking for higher dividends now.

Dace=decade

Meanwhile UBS and Deutsche bank give buy ratings, 750 and 585 respectively. Everyone is trying to find a reason for the big sell-off, and everyone struggles to find one. Recession fears? Why, because there was no fear before Thursday? No demand fears? We had that before as well, only now we have the company saying things look quite good so far. War and oil price? Certainly, but then why all other companies have declined much less? This is clearly company specific. And it is either major fear for the big buy orders of new aircraft (which would take place with plenty of flexibility across more than a dace, and BTW,, but apparently this is a sign of dilution??), or simply manipulation in a weak macro environment. But can we really have manipulation at this scale? Very confusing.

I do not think this is about the fires (ok a little bit). US airlines also dropping. I think Ryanair saying "we have very limited Q3 visibility and zero Q4 visibility" has not left a good impression, and markets are again back to the discussion of recession, low demand for next year.

At the same time, I struggle to think this is the reason, first because the recession is forecasted to be mild (and many other stocks are priced for this scenario), second because the last year has shown quite convincingly that even with high inflation, mortage rates, etc. people will not eat before they skip their holiday. I think the market is wrong on this, but the market decides the SP....Patience. 600 will come.

In 2019, half-year (always the non profitable months) losses were around 270 million. This year, half-year losses were 550 million. Plus 114 million loss in Q3, with the infamous holiday disruptions.
I would actually be surprised for a loss of "just" 120 million for the full year. I guess the market already knows this?

"In May, Lundgren refused to give any guidance but said cryptically he was 'not unhappy with the consensus out there that we'd be making a small profit'.
Is this still on the cards?
He hints the answer is 'No' though he declines to say so explicitly.
'We've never given any guidance on results for this. We will have a summer that's profitable but the annual results are a different thing.'
He points again to following analysts' guidance, which currently forecasts a loss of £127million."
https://www.thisismoney.co.uk/money/markets/article-11269713/After-Covid-turbulence-Johan-Lundgren-sees-bright-future-easyJet.html

The 100 (more like 130) million loss is an estimate for the year, not the quarter. The quarter may be perhaps "record breaking", but the first half of the year still had lockdowns and the stupid traffic lights system in the UK, and the disruptions in early summer.
The question is whether less people will flight in a recession or with the pseudo-lockdowns of end 2021/early 2022.

https://www.thisismoney.co.uk/money/markets/article-11269713/After-Covid-turbulence-Johan-Lundgren-sees-bright-future-easyJet.html

I think no profits are the most likely option. What a loss of 120m means in a year where 6 months were disrupted by lockdowns is less clear. Not that it matters in this market. Even with good news, everything keeps going down

From simplywall.st
"The latest balance sheet data shows that easyJet had liabilities of UK£3.99b due within a year, and liabilities of UK£3.91b falling due after that. Offsetting these obligations, it had cash of UK£3.51b as well as receivables valued at UK£336.0m due within 12 months. So its liabilities total UK£4.05b more than the combination of its cash and short-term receivables. "
OK about net debt, but what about long term liabilities in the current scenario of reduced demand?
Again, the question for me is simply about the percentage risk of a new rights issue. If that is low, then the SP will definitely recover in the next few years, but I struggle to put a number on that risk. Any (constructive and informative) comment on this is welcome