Passenger figures from two prominent budget European airlines released on Friday indicated a significant increase in passengers in June, offering a positive boost to the travel sector’s recovery expectations and helping airline stocks rise. Ryanair, based in Ireland, says it flew 5.3 million passengers in June 2021, up from 400,000 the year before. Hungary’s Wizz Air reported 1.6 million passengers this month, up from 500,000 in June 2020. Both companies’ shares are traded on the London Stock Exchange.
“After promising figures from the sector, airline stocks did their best to fly higher,” said Russ Mould, an analyst at AJ Bell. “In June, Wizz Air filled nearly two-thirds of its seats on active aircraft, while Ryanair flew nearly three times as many people as it did in May.” Ryanair RYA, +2.22 percent saw its stock rise 1.7 percent, while Wizz Air WIZZ, +1.23 percent saw its stock rise 0.5 percent. Other airlines with stocks that caught the updraft of the favorable passenger figures were IAG IAG, +0.19%, which owns British Airways and other carriers, and EasyJet EZJ, +0.89 percent, which owns British Airways and other carriers. “These are positive figures in the circumstances. The airline business model, on the other hand, is built on filling planes to near or full capacity and then charging extra costs for everything from early boarding to luggage storage,” Mould explained. Also see: European equities rally ahead of US payrolls data, capping a week marred by delta variant concerns “The business requires a constant flow of passengers through airports, and continued Covid restrictions imposed by various governments across the world mean the market is still a long way from being fully operational,” the analyst noted. In late afternoon trade, the FTSE 100 UKX, -0.05 percent —the index of the top U.K. firms by market capitalization— was flat, indicating that the airline news had a mixed impact on London trading. Major European stock indices have had a tumultuous week, as the area has been jolted by growing concerns about the delta variant of COVID-19, which has resulted in increased travel restrictions throughout the continent. New limitations on travelers from the United Kingdom, where the variation is predominant, have been imposed by Spain, Portugal, and Malta. Stocks, on the other hand, have taken it in stride, according to analysts, and are expected to close the trading week at the same level or slightly higher than they were on Monday. In addition, here’s how different countries handle Delta variation hotspot arrivals. And, according to JPMorgan, here’s how the delta variant could affect markets and what to do about it. “Investors have had a tough week, with markets having a couple of bad days,” Mould said. “Fortunately, UK stocks are on track to recoup all of last week’s losses, demonstrating that it pays to be patient when it comes to investing. Patience is essential.” The FTSE 100’s performance, according to Mould, is mostly due to pharmaceutical and consumer goods businesses. GlaxoSmithKline GSK, -0.03 percent saw its stock rise over 1% before reversing course and closing 0.2 percent down. The British pharma company has turned down activist investor Elliott Management’s plan to shake up its board of directors and start a process that could jeopardize CEO Emma Walmsley’s career. In a transaction worth up to $2.2 billion, GSK announced a collaboration with Alector ALEC, +73.23 percent of the United States to develop two medications for the treatment of Alzheimer’s disease and other neurological illnesses. The stock of Informa INF, +3.59% increased 3.5 percent after investment bank Berenberg upgraded the publishing and events company’s shares. Oil prices have fallen from their highs, with benchmark Brent BRN00, -0.16% oil down marginally after breaking through the $76 per barrel barrier. BP BP, -0.76 percent, and Royal Dutch Shell RDSA, -0.89 percent, both of which are traded on the London Stock Exchange, fell in lockstep. Shares in Barclays BARC, -1.10 percent, HSBC HSBA, -1.57 percent, Lloyds LLOY, -1.32 percent, and NatWest NWG, -1.64 percent all fell more than 1%./n
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