Easyjet sent into freefall: Shares continue to tumble
Shares in budget flier Easyjet continued to tumble today after UBS said on Friday that the carrier would likely lag behind rivals in its recovery from the pandemic.
Having tumbled 13.4 per cent yesterday, shares were down another 0.7 per cent this morning. Since Wednesday, when the carrier announced a £1.2bn rights issue, shares are down over a quarter from their peak.
Last week’s reports that rival Wizz Air had made a bid for Easyjet has raised concerns that the airline will continue to be the subject of takeover offers.
In a note, IG’s Josh Malony said that the pandemic had increased the likelihood of consolidation in the crowded sector.
“With the sector clearly under pressure over the course of this pandemic, laggards do run the risk of being swallowed up by more successful competitors”, he wrote.
“The Wizz Air takeover attempt of Easyjet does highlight how many see the airline as an easy target that is going through a tough time.”
Elsewhere the Telegraph reported that the carrier was positioning itself to pounce on BA’s portfolio of slots at Gatwick if the IAG-owned airline cannot agree a new short-haul operation from the airport.
BA is currently in talks with its unions about setting up a new subsidiary out of the Crawley airport, where it has consistently struggled to make money.
But it has already warned that if it cannot come to an agreement on the proposal if may have to sell off its slots.
Snapping these up would allow Easyjet to consolidate its position at Gatwick, where it is already the biggest player.
The Telegraph said that it was also considering launching a bid for new slots at Orly Airport in Paris.
When it announced its rights issue last week the carrier said that the proceeds would “position us for growth so that we can take advantage of the strategic investment opportunities expected to arise as the European aviation industry emerges from the pandemic.”