Ask Traders26 Oct 2025 16:17
Thought I would share this :
Bull Case:
Reached a compensation agreement with Pratt & Whitney to cover direct costs and provide operational support through 2026.
Taking delivery of 50 new, fuel-efficient Airbus A321neo aircraft in 2025-26 to modernise the fleet.
Refocusing on core European operations after exiting the Abu Dhabi market, which could provide financial relief.
Implementing strategic adjustments, such as extending leases on older aircraft, to mitigate the impact of groundings.
Bear Case:
Ongoing defects in Pratt & Whitney engines have grounded a significant portion of the fleet, with around 38 aircraft still out of service.
The stock has underperformed, declining over 20% year-to-date due to operational disruptions.
Operating profit for the fiscal year ending March 31, 2025, fell by 61.7%, missing analyst expectations.
The resolution timeline for engine issues extends to the end of 2027 and is not guaranteed, creating prolonged uncertainty.
Capacity constraints are hampering the airline's ability to capitalize on travel demand.