J-10 While no one welcomes a large share price drop, it is very important to understand the background. EasyJet is one of the most stable airlines in Europe and will make a substantial profit this year, like every other year. In addition due to its ongoing expansion, it will continue to make even greater losses every winter - offset by bigger profits over the whole year. That is the nature of the European airline industry - lose a lot in the winter and make it up in the summer. I am not aware of any airline to whom that does not apply.
Stelios, as always, is unable to resist any opportunity to talk down his own company and is obsessed with 'consolidation' in order to get his hands on the big money when dividends start in 2012. He perceives money spent on aircraft as money coming out of that dividend. Personally I do not accept that characterisation but there you have it. Whether he likes it or not, all airlines were hit massively by the snow and, due to ridiculous EU legislation, are being left to pick up the bill for a problem that is completely outside of their control. A number of UK airports in particular are spectacularly failing in their obligations to keep their runways open in adverse weather and the airlines are paying for their inadequacies.
Not surprisingly, many people are listing easyJet shares as a 'buy' right now, and if I had some serious money I would be going for it in a big way. The share price will rise again pretty quickly and some sharp people will make a killing on it. It is also worth noting that due to the traditionally slack period that is January, easyJet held a 4-day sale last week. They had around 680,000 hits in one day on the website and at one stage were selling enough tickets online to fill an aircraft every 4 seconds. Furthermore the yields are up and the load factor over the year is running at around 87%. There are many airlines who would love to be in that position right now. In the next few weeks many less fortunate airlines will be releasing first quarter figures bad enough to make a glass eye cry and the figures from easyJet will be given a sense of perspective. The time to talk down easyJet will be in September when the end-of-year figures come out, but I do not imagine there will be too many airlines in a position to better the numbers posted by the Orange Empire - we shall see.