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Highlights
- The airline industry is impacted by the rise in crude oil prices triggered by the Russia-Ukraine war.
- The industry was hoping for a revival in 2022 after the pandemic but has been hit hard again with flight cancellations and travel bans.
The Russia-Ukraine conflict has rattled the global economy as the war between two countries has now entered its 13th day. The conflict has adversely impacted several sectors, including the Airlines industries.
The airline industry is impacted by the record rise in crude oil prices triggered by the Russia-Ukraine war. The Brent crude oil prices rose to nearly USD 140 per barrel, the highest level since 2008 after a series of sanctions on Russia led to supply concerns in the global energy markets. Aircraft fuel is a major expense for airline companies. The current rise in crude prices may adversely impact the earnings of FTSE-listed airlines companies like British Airways owner IAG Group, EasyJet Plc.
In addition, the ongoing conflict has led to flight cancellations, travel bans, and diversion of long-haul flights routes to avoid the use of Russian and Ukrainian airspace. The travel industry was hoping for a revival in 2022 after the pandemic, but the geopolitical worries are going to make the situation and recovery difficult for the industry.
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Let us look at 3 FTSE listed airlines stocks that might be impacted:
Wizz Air Holdings Plc (LON: WIZZ)
The company provides passenger airlines services across Europe. It has major operations in short and medium-haul routes. The company has operations as well as an aircraft base in Ukraine and is still awaiting the safe evacuation of its four aircraft from the country. Amid the rising fuel prices, the company has capped its fuel cost exposure for the next four months using a zero-cost hedge.
Wizz Air Holdings Plc’s last close was at GBX 2,496 on 07 March 2022, with a market cap of £2,572 million.
International Consolidated Airlines Group (LON: IAG)
FTSE100 listed airlines company has operations in the UK, Europe, and many other countries. It provides passenger as well as cargo transportations services. The company’s business showed signs of recovery in the last quarter of 2021. Its passenger capacity reached 58% of 2019 capacity in the fourth quarter following ease in travel restrictions.
Also, the company expects 85% of 2019 capacity in 2022. However, recent war-related travel restrictions and a rise in fuel costs might impact the business.
International Consolidated Airlines Group’s last close was at GBX 116.24 on 07 March 2022, with a market cap of £5,768 million.
EasyJet Plc (LON: EZJ)
The airline carrier has major operations in European markets. It also provides financial and tour services to its customers. For the three months ended 31 December 2021, the company operated over 30,000 flights, and its passenger capacity was close to 71% of 2019 capacity, which resulted in higher passenger revenue.
EasyJet Plc’s last close was at GBX 439.50 on 07 March 2022, with a market cap of £3,331 million.
