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Highlights
- The UK airline industry announced a reduction of air passenger duty (APD) on domestic routes.
- According to the official figures, the tax reduction fell from £13 to £6.50 per passenger on 1 April.
The UK airline industry got a shot in the arm following the decision to reduce air passenger duty (APD) on domestic routes. Last week, the Rishi Sunak government reduced the APD on all the UK domestic routes by half to incentivise the airlines to expand their networks to reinforce UK connectivity and ensure passengers can access affordable flights.
The airline industry was one of the worst hits, along with the retail sector amid the Covid-19 pandemic and the subsequent lockdowns. Following this, the strikes by the airports too played didn’t help the airline industry either. But, the reduction has opened doors for the leading airline industries to expand operations in the country. In fact, leading airline Ryanair is keen to offer nine new links, and easyJet also is planning to expand its capacity.
According to the official figures, the tax reduction fell from £13 to £6.50 per passenger on April 1. Consumer group Which? feels that this could prompt passengers to travel more by air than train as a result of the APD cut. Especially with the Easter weekend up ahead, train tickets are expected to rise by an average of 35%.
Amid this, let’s explore the performance of some of the leading LSE-listed airline stocks.
easyJet Plc (Lon: EZJ)
easyJet (LON:EZJ) has started the year with a bang. The airline stocks performed well in March as the shares of the leading airline closed March with 6.5% gains. The easyJet shares were witnessing an increase of 0.55% and were trading at GBX 515 at the time of market opening at 8:17 AM (BST). However, despite the recent gains, the EZJ stock has given its investors negative one-year returns of -7.60% and positive YTD returns of 57.98%. The London-based airline enjoyed a market cap of £3,882.53 million with an EPS of -0.22.
Wizz Air Holdings Plc (LON:WIZZ)
Another LSE-listed airline stock has begun 2023 on a bright note. In an announcement, Wizz Air Holdings’ PLC revealed that it carried approximately 3.8 million passengers, an increase of 97% year-on-year in February 2023.
The FTSE-250 index constituent enjoyed a market cap of £ 2,922.71 million. The WIZZ stock on 4 April was trading at GBX 2823 and was down by -0.25% at 8:52 AM BST. Over the past year, the WIZZ has given its investors negative returns of -1.08% and YTD returns of 49.02%.
International Consolidated Airlines (LON: IAG)
Another FTSE-100 constituent was seen enjoying a market cap of £ 7,311.30 million as of 4 April 2023. The IAG stock witnessed a rally of 1.19% and was trading at GBX 149.25 as of 9:07 AM BST on Tuesday. The IAG stock has given its investors yearly returns of 5.57% and YTD returns of 20.36%.
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.
