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Highlights
- British Airways cancels 10,300 more flights during the summer holiday months as it struggles with staff shortages.
- Consumer Group Which? has reported Easyjet to CAA over the treatment received by passengers facing flight cancellations.
In the latest blow to travellers, British Airways (LON: IAG) is cancelling 10,300 more flights during the summer holiday months as it struggles with staff shortages creating chaos across the aviation sector in Europe. Consumer group Which? has reported EasyJet (LON: EZJ) to the Civil Aviation Authority (CAA) over the treatment received by travellers facing flight cancellations.
BA’s new cancellations
Amid the growing post-pandemic travel demand, British Airways has announced that it will cut more short-haul flights from August to October end. Including the fresh 10,300 cancellations, approximately 30,000 flights would be scrapped from BA's schedule over these crucial summer months. The impacted airports include Gatwick, London Heathrow, and City airports.
After the lifting of the pandemic-related restrictions, the travel demand has surged, creating a lot of pressure on airlines facing staff shortfalls. Reportedly, the editor of Which? Travel, Rory Boland, claims that these recent cancellations represented BA's defeat to handle its flight schedule over the coming months.
Last month, the Department for Transport (DfT) announced an amnesty for airlines that are not confident about handling their flight schedule. The deadline for this amnesty is this Friday, and the flight cancellations have been announced ahead of that. The intent behind the move was to minimise the schedule disruptions and build resilience in the aviation sector.
Investing in British Airways
To invest in British Airways, investors have to buy the shares of International Consolidated Airlines, which has 100% stakes in BA. IAG unites the top airlines in the UK, Ireland, and Spain. IAG is a constituent of the FTSE 100 index and holds a market cap of £5,238.95 million as of 7 July.
As the aviation sector has been hit hard due to the pandemic and other factors, the performance of the airline has gone down lately. Lying in the negative territory as of 7 July, the one-year and YTD returns of IAG stand at -44.38% and -25.24%, respectively. Its EPS is also in the negative territory, at -0.59.
IAG’s shares surged by 0.57% at around 8:30 AM (GMT+1) on 7 July, at GBX 106.38.
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EasyJet facing legal action
Low-cost airline EasyJet is potentially facing legal action for violating consumer law over hundreds of flight cancellations. According to Which? the budget airline abandoned the holidaymakers abroad. Passengers were left stranded and were allegedly sleeping on the floors of airports post their flights were cancelled and were spending hundreds of pounds booking new flights after that.
Consumer watchdog Which? has reported easyJet to the CAA over the awful treatment given to passengers by the airline as many passengers weren’t aware of their legal right to fair compensation and to be connected with other airlines in case of cancellations.
Travellers are set to face a dismal summer with more potential flight cancellations coming their way as the aviation sector tumbles. Amid this chaos, the CAA and the government must act together to protect the rights of passengers.
Investing in Easyjet
Budget airline EasyJet is a constituent of the FTSE 250 index and holds a market cap of £2,707.61 million as of 7 July. Like other airlines, Easyjet has also been severely impacted by the pandemic restrictions and other global factors and thus the airline’s performance has depreciated lately.
Lying in the negative territory as of 7 July, the one-year and YTD returns of Easyjet stand at -61.43% and -35.14%, respectively. Its EPS is also in the negative territory, at -1.59.
EZJ’s shares surged by 0.64% at around 9:00 AM (GMT+1) on 7 July, at GBX 359.50.
