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Highlights
- Airlines UK, a trade body representing the UK registered airlines, has asked for immediate financial assistance for the airline industry, facing the latest stress of Omicron.
- The sector has not received any direct support from the government since the end of the furlough scheme.
Airlines UK, a trade body representing the UK registered airlines, has asked for immediate financial assistance from the government for the airlines’ industry amid lower demand for flights following a new set of travel restrictions after a recent rise in Omicron variant cases.
The airline industry, which provides nearly 500,000 direct jobs and contributes more than £10.9 billion to the country’s GDP, has been adversely impacted since the Covid-19 pandemic started. Moreover, the industry was last to open after an ease in restrictions and showed some signs of recovery in recent months. However, a fresh rise in Omicron variant cases has derailed the business operation because rules like compulsory coronavirus testing requirements before flying have adversely impacted the consumer sentiments leading to demand fall.
In addition, the airline sector has not received any direct support from the government since the end of the furlough. Instead, the government had urged the airlines to maintain sufficient liquidity and preserve cash. The airline industry is also facing a debt burden as many airlines have borrowed heavily since the start of the pandemic to support business operations.
Let us look at FTSE listed airlines stocks that are severely getting impacted due to the recent rise in Omicron variant cases:
International Consolidated Airlines Group (LON: IAG)
FTSE100 listed company provides passenger and cargo services globally. It is one of the largest airlines companies worldwide. During the third quarter, the company’s passenger-carrying capacity rose to 43.4% of 2019 from 21.9% of the second quarter.
The company had earlier stated that it is recovering from the pandemic impact and aims to reach a passenger capacity of 60% in the last quarter. However, the recent travel restriction to curb the spread of the virus might impact the airline operations adversely, leading to lower capacity.
IAG Group current market cap stands at £7,142 million as of 24 December 2021.
EasyJet Plc (LON: EZJ)
The company carry out its airline’s operations mainly in European countries. It also has a tour and aircraft leasing business. For the financial year ended 30 September 2021, the airlines reported a 51.6% decline in revenue at £1,458 million. The passenger-carrying capacity decreased by 48.9% to 28.2 million seats.
The company has been steadily increasing its passenger-carrying capacity as it anticipates a full recovery in capacity by the fourth quarter of FY22. However, a complete recovery can only be possible if the new travel restrictions are not implemented.
EasyJet Plc’s current market cap stands at £4,185 million as of 24 December 2021.
Wizz Air Holdings Plc (LON: WIZZ)
Low-cost passenger carrier has operation across Europe and the Middle East countries. It provides point-to-point passenger air services and has a fleet of 144 aircraft.
The airlines reported €880.4 million in revenue and carried 12.5 million passengers in the six months ended 30 September 2021. However, the company reported a loss of €120.9 million during the period.
Wizz Air Holdings Plc’s current market cap stands at £4,448.47 million as of 24 December 2021.
