Highlights

• Heathrow Airport reported an increase in demand in March after easing of covid-related travel restrictions.
• While the airport has raised its passenger forecast, it has announced that it will still be at loss in 2022.
• The company updated its 2022 passenger forecast to 52.8 million from 45.5 million.

Heathrow Airport reported January and February as the weaker than expected months due to Omicron-related travel restrictions. The demand in March increased following the easing of UK travel restrictions on 18 March.

While the airport has raised its passenger forecast, it has also announced that it will still be at loss in 2022 due to demand volatility as the summer travel boom gives way to a winter freeze. Besides, slower economic growth, increasing inflationary pressure, and geopolitical tension between Russia and Ukraine will drag on demand.  

2022 Kalkine Media®

Despite 9.7 million passengers travelling through the west London airport in Q1 2022, it is not expected to return to profits this year. Its revenue increased by 212.7% to £516 million, from £165 million in Q1 2021, and the adjusted EBITDA saw a 1,465% increase to £273 million, from a loss of £20 million in Q1 2021. Despite this, its total pandemic losses have now exceeded £4 billion. However, the airport’s liquidity is still robust with gearing going back to pre-pandemic levels.

The company updated its 2022 passenger forecast to 52.8 million from 45.5 million as demand is temporarily driven by UK outbound leisure passengers taking advantage of eased travel restrictions and redeeming travel vouchers. The updated passenger forecast will represent a return to 65% of pre-pandemic traffic. 

In recent weeks, airlines are canceling services into autumn, and passengers were forced to wait in long queues due to staff shortages, with various markets still closed nearly 80% with vaccination requirements, and a rise in covid cases could lead to the return of UK travel restrictions.

The company is further planning to recruit over 1,000 new security staff and reopen Terminal 4 by July to continue delivering a more efficient service over the summer. It is also assisting airlines, retailers, and ground handlers to fill over 12,000 vacancies across the airport.

Let us look at 3 FTSE-listed airline stocks.

1. International Consolidated Airlines Group S.A. (LON: IAG)

The UK-based one of the largest airline holding groups, International Consolidated Airlines Group S.A operates a fleet of 533 aircraft in 279 destinations. The company has recently announced to make a €100 million seven-year unsecured loan to Globalia and it will have a choice to convert the loan into an up to 20% equity stake in Air Europa.

With a market cap of £7,325.16 million, International Consolidated Airlines Group S. A’s shares were trading at GBX 149.38, up by 1.28% at 10:15 AM (GMT), as of 25 April 2022. The FTSE 100 listed company’s share value depreciated by -24.02% over the last one year as of 25 April 2022, while its year-to-date return stands at -4.91%.

Also Read: HSBC Q1 profit slides amid Russia-Ukraine war. Should you hold the stock?

2. Easyjet Plc (LON: EZJ)

The multinational low-cost airline group, Easyjet Plc, operates domestic and international scheduled services on over 1,000 routes in over 30 countries, with 342 aircraft. The company reported an increase in capacity in the six months to 31 March, operating at 80% of FY2019 and it also continued to strengthen its position as a significant player in the holidays market, with more than 70% of the programme already sold.

With a market cap of £4,308.53 million, Easyjet Plc’s shares were trading at GBX 580.40, up by 2.11% at 10:15 AM (GMT), as of 25 April 2022. The FTSE 250 listed company’s share value depreciated by -41.14% over the last one year as of 25 April 2022, while its year-to-date return stands at -4.42%.

Also READ: BATS, DGE, GSK: Should you invest in these manufacturing stocks now?

3. Wizz Air Holdings Plc (LON: WIZZ)

The Switzerland-based airline company, Wizz Air Holdings Plc, offers low-cost air transportation services on scheduled short-haul and medium-haul point-to-point routes across 45 countries in Europe, North Africa, and the Middle East, with a fleet of 121 Airbus aircraft.

The company recently reported that it expects a net loss of € (652)-(632) million in FY2022, while its operating result is expected to be in the range of € (210) - (190) million.

With a market cap of £3,256.07 million, Wizz Air Holdings Plc’s shares were trading at GBX 3,223.00, up by 2.03% at 10:15 AM (GMT), as of 25 April 2022. The FTSE 250 listed company’s share value depreciated by -31.25% over the last one year as of 25 April 2022, while its year-to-date return stands at -23.04%.

Also Read: Sainsbury, Tesco: Should you consider buying these stocks now?

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.