- Transport Secretary Grant Shapps has said airlines should work to bring trust back into the system.
- Staff shortage has forced several airlines to cancel flights in recent weeks.
Air travellers in the UK have faced major disruptions in recent weeks after several airlines delayed or cancelled flights over the lack of resources to fulfil the overwhelming demand. As people rushed to the airports, they were forced to wait or turn back due to the delays or cancellations, leading to chaos at several airports such as Heathrow, Birmingham, and Manchester.
Reacting to the disruptions, Transport Secretary Grant Shapps has said that the airlines need to bring trust back into the system. In an interview, Shapps said that the carriers underestimated the demand and didn't realise that rising COVID-19 infections would lead to problems due to the shortage of staff. He added that he would meet with some of the airlines and understand how they plan to bring the schedules back in place.
Notably, British Airways has scrapped over 100 flights till September for destinations including Miami, Hong Kong, and Tokyo. Over the Easter weekend, the flag carrier cancelled about 300 flights, ruining the holidays for several travellers. On the other hand, budget airline EasyJet also axed hundreds of flights, leaving passengers stranded.
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Why are the flights being cancelled?
The primary reason behind the cancellation of flights is the shortage of staff. Rising COVID-19 cases have led to higher levels of employee sickness even though the demand for travel has increased after the government lifted the coronavirus-related restrictions. The staff shortage has also resulted from people finding jobs elsewhere after they were laid off by the airlines during the pandemic.
Additionally, airlines have failed to quickly recruit enough staff to cater to the rise in demand, leading to long queues and chaos at the airports.
In such a situation, investors might be wondering if it is the right time to invest in airline stocks. Here's a look at some such stocks and how they have been faring.
International Consolidated Airlines (LON: IAG)
The FTSE 100-listed company is the owner of the UK's flag carrier British Airways. Besides British Airways, the company has four more airlines in its portfolio, including Iberia, Aer Lingus, LEVEL, and Vueling.
The company's shares ended at GBX 141.28 on 26 April 2022. Its current market capitalisation stands at £7,016.26 million. In the past one year, it has given a negative return of 31.08% to its shareholders.
EasyJet Plc (LON: EZJ)
With a fleet of over 350 aircraft, easyJet is a low-budget carrier based out of the London Luton Airport. The company has reported an improvement in performance in the first half of FY2022 and expects the total group revenue for the period to be around £1,500 million.
EasyJet Plc’s shares closed at GBX 553.20 on 26 April 2022. Over the past one year, the company's share price has plunged by 46.21%. Its market capitalisation as of 26 April 2022 is £4,193.31 million.
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Wizz Air Holdings Plc (LON: WIZZ)
The Swiss-based low-cost airline is listed on the FTSE 250 index. For the financial year ending 31 March 2022, the company expected a reported net loss of €652-632 million.
On 26 April 2022, the company's shares closed at GBX 3,110.00. The company's market capitalisation stands at £3,205.56 million and its stock price has declined by 35.19% in the last one year.
Note: The above content constitutes a very preliminary observation or view based on market trends and is of limited scope without any in-depth fundamental valuation or technical analysis. Any interest in stocks or sectors should be thoroughly evaluated taking into consideration the associated risks.
Tags: Airline stocks, British Airways, International Consolidated Airlines, EasyJet, Whizz