Will easyJet shares slump after UK adds France to quarantine list?

easyJet said that it plans to operate a full flight schedule even though the UK government continues to add more countries to its Covid-19 quarantine list, which now includes France and the Netherlands.

The news will likely be welcomed by those looking to fly, but investors took a dim view of the decision, with the low-cost airline seeing its share price fall 7% on Friday.

‘We plan to operate our full schedule in the coming days. Customers who no longer wish to travel can transfer their flights without a change fee or receive a voucher for the value of the booking,’ an easyJet spokesperson said.

‘Should any flights be cancelled for later in August customers will be notified and informed of their options which includes transferring to an alternative flight free of charge, receiving a voucher or applying for a refund via a webform on our dedicated Covid Help Hub at easyJet.com.’

The UK government has already added Malta and Spain to its quarantine list which sees travellers forced to adhere to a 14-day self-isolation period when returning from holiday.

easyJet shares are trading at 566p per share at the time of publication, with the stock down 60% year-to-date.

easyJet shares could hit 600p, says Barclays

Despite the dip in share price on Friday, analysts at Barclays believe the stock will rebound, with the lender reiterating its ‘equal weight’ rating and issuing a target price of 600p per share in August.

The price target implies a potential upside for easyJet of 6%.

easyJet is looking to bring in as much cash over the summer holiday period, with the low-cost airline putting on a major sale and launching its summer 2021 sales earlier than ever before in an effort to capitalise on demand.

However, the real test for easyJet in the coming months will be if holidaymakers will be comfortable travelling to destinations on the ever-growing quarantine list and if passenger demand will wane due to fears of a second wave.

easyJet sees summer short-haul flights increase, lifting shares

easyJet’s Q3 performance earlier this month was in line with expectations, with the airline ending the period with a re-start to flying.

However, based on current travel restrictions, easyJet expects to fly around 40% of its planned capacity for the fourth quarter (Q4) 2020, with the airline forecast to record a smaller loss in Q4 than in Q3, however.

The low-cost airline raised its Q4 schedule to 40% capacity, up from its previous guidance of 30%, with the company’s return to the skies helping to lift its share price 32% in August.

If easyJet is able to meet its capacity targets for Q4, the stock could break through key resistance levels. But if Covid-19 cases surge and governments are forced to impose further travel restrictions, airline stocks will likely slump.

‘Returning to the skies again allows us to do what we do best and take our customers on much-needed holidays,’ easyJet CEO Johan Lundgren said.

‘Our bookings for the remainder of the summer are performing better than expected and as a result we have decided to expand our schedule over the fourth quarter to fly c.40% of capacity,’ he added.

‘This increased flying will allow us to connect even more customers to family or friends and to take the breaks they have worked hard for.’

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