Are these 3 FTSE airline stocks worth holding?

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Are these 3 FTSE airline stocks worth holding?

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 Are these 3 FTSE airline stocks worth holding?
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HIGHLIGHTS

  • For the half-year ended 30 September 2021, Jet2 plc reported a 43% year-on-year rise in revenues to £429.6 million from £299.9 million during the same period in 2020.
  • Wizz Air Holdings inked an agreement with Airbus S.A.S. to purchase 27 Airbus A321XLR and 75 Airbus A321neo aircraft, slated for delivery between 2025 and 2027.
  • During Q4 2021, EasyJet operated at 58% of FY19 capacity, impacted by lower demand on international routes.

Air travel in the UK continue to remain over 50% lower than the pre-pandemic levels. It was reported that only around 4.5 million airline passengers arrived in the country in the month of October. Although this figure was higher than 1.7 million passenger arrivals in October 2020, it continued to remain 54% lesser than 9.8 million passenger arrivals in October 2019.

Relaxation of travel restrictions resulted in pent-up demand, with over 60% of the air passenger arrivals in the UK in October 2021 comprising British nationals. In the period from April 2020 to October 2021, the total air passenger arrivals were around 53% lower than the levels seen before the pandemic. Fall in demand has deeply impacted growth in the travel sector and impacted several jobs.

Complicated arrival requirements are further expected to dent the country’s aviation industry. The government announced a review of England’s rules for international travel in January 2022. Below is a detailed review of the investment potential in three airline stocks - Jet2 Plc, Wizz Air Holdings Plc and EasyJet Plc.

Jet2, Wizz Air & EasyJet: Market cap details

(Data source: Refinitiv)

 

Jet2 Plc (LON: JET2)

Jet2 plc is a multinational airline firm. In October, the company inked an agreement with Airbus to purchase 15 new Airbus A321 NEO aircraft, slated to be delivered between 2026 and 2029.    

For the half-year ended 30 September 2021, the leisure travel group reported a 43% year-on-year rise in revenues to £429.6 million from £299.9 million during the same period in 2020. Jet2 Plc reported an operating loss of 53% year-on-year to £170.4 million in H1 2021 compared to £111.2 million in H1 2020. Its total loss for the period after taxation was £163.5 million compared to the previous year’s £68.7 million.

Although Jet2 Plc’s seat capacity for H1 2021 increased by 86% to 2.68 million compared to 1.44 million in H1 2020, the average load factor, however declined to 57.3% during the period.

At the close of the day’s trade on 25 November 2021, the shares of Jet2 Plc last traded at GBX 1,121.50, down by 0.09%. The market cap of the company currently stands at £2,409.10 million.

Wizz Air Holdings Plc (LON: WIZZ)

Wizz Air Holdings is one of the leading airline groups in Europe. Recently, Wizz Air Holdings inked an agreement with Airbus S.A.S. to purchase 27 Airbus A321XLR and 75 Airbus A321neo aircraft, slated for delivery between 2025 and 2027.

For the half-year period ended 30 September 2021, Wizz Air Holdings’ total passengers carried increased by 92.7% year-on-year to 12.5 million compared to 6.5 million in H1 2020. The company reported revenue of €880.4 million in H1 2021, representing an increase of 86.8% year-on-year from the previous year’s €471.2 million.

At the close of the day’s trade on 25 November 2021, the shares of Wizz Air Holdings last traded at GBX 4,399.00, up by 1.08%. The market cap of the company currently stands at £4,490.72 million.

EasyJet Plc (LON: EZJ)

EasyJet is a low-cost airline company. For the year ended 30 September 2021, the company is expecting loss before tax in the range of £1,135 to £1,175 million.

During Q4 2021, EasyJet flew 17.3 million seats, operating at 58% of FY19 capacity, as the demand for international routes from the UK remained impacted by government travel restrictions.

EasyJet expects Q1 capacity to be up to 70% of 2019 levels. The airline has added 100,000 seats for Q1 on account of strong demand for winter-sun destinations.

At the close of the day’s trade on 25 November 2021, the shares of EasyJet last traded at GBXcons 564.40, up by 1.33%. The market cap of the company currently stands at £4,222.12 million.stock

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