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easyJet (EZJ) shares are encountering turbulence this morning after monthly traffic statistics shows the budget airline struggling to keep pace with rival Ryanair (RYA). While EZJ passenger numbers may have climbed 4.3% to 5.73m in March the all-important load-factor fell by a worrying 130bps to a disappointing 91.3%. On the flip side its rolling 12m total for passengers did grow 7.2% to 70.8m and the load factor actually ascended 60bps to 91.5%.
Good news until you compare it to competitor RYA’s record-beating numbers in March which showed passengers +28% to 8.5m, a load factor up a whopping 400bps to 94% and a rolling 12m passenger total soaring 18% to 106.4m.
While EZJ points to French strikes as a mitigating factor for March weakness, it is interesting to note that RYA did too and yet it still managed to post steady growth in both passenger numbers and loads. O’Leary’s move to a more ‘cheap and cheerful’ strategy as opposed to the old ‘cheap and nasty’ continues to pay off. Can the man do no wrong?
Mike van Dulken, Head of Research, 6 April
This research is produced by Accendo Markets Limited. Research produced and disseminated by Accendo Markets is classified as non-independent research, and is therefore a marketing communication. This investment research has not been prepared in accordance with legal requirements designed to promote its independence and it is not subject to the prohibition on dealing ahead of the dissemination of investment research. This research does not constitute a personal recommendation or offer to enter into a transaction or an investment, and is produced and distributed for information purposes only.
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