EZJ, TUI, WIZZ, JET2, and IAG shares in danger as chaos continues
easyJet shares are down by 8%, TUI down 22%, Wizz Air down 11%, Jet2 down 9% and IAG shares down 15% in the past month alone.
Training challenges
Training new staff cannot start until new hires gain security clearance from the Civil Aviation Authority and the government. This is reportedly taking far longer than in the past.
Former IAG CEO Willie Walsh, who now works as director-general of the International Air Transport Association, recently warned ‘you can’t start the training until you’ve got the security clearance. You offer them a job, they accept it, and then you have to go through this period of three months to get security clearance – they’re not gong to hang around. They’ll go and find a job somewhere else.’
To help solve the crisis, the government changed the vetting rules at the end of April so that they can be partially trained while waiting for their clearance. Moreover, the Cabinet Office told BBC News ‘there are absolutely no delays to security vetting of applicants. It is wrong to suggest otherwise, and we are prioritising vetting applications from the aviation industry.’
Meanwhile, Transport Secretary Grant Shapps has argued that ‘operators seriously oversold flights and holidays relative to their capacity to deliver. This must not happen again and all efforts should be directed at there being no repeat of this over the summer.’
Jet2 CEO Steve Heapy thinks ‘Brexit has taken hundreds of thousands, if not millions of people out of the employment market and that undoubtedly is having an impact.’ However, the government has ruled out changes to the Shortage Occupation List to allow EU workers to fill the gap.
And the Passport Office has reported that 5 million people delayed their passport applications during the pandemic amid worsening wait times. UK airline stocks could be hit with even higher demand in a few weeks, just as staff threaten to strike amid a training and recruitment crisis.
Moreover, most airlines don’t expect to be running at pre-pandemic capacity levels this quarter. Just 4.2 million people went through Heathrow in March 2022, compared to the 5.4 million seen in February 2020 before the pandemic began.
easyJet, TUI, Wizz Air, Jet2, and IAG shares are trading on optimism for a summer boom. But time is not on their side.
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