Investors advised to ‘hold’ EasyJet due to its strong trading position

As EasyJet updates the market Ian Forrest, investment research analyst at The Share Centre, explains what it means for investors.

“In a pre-close trading update announced today EasyJet reported a strong finish to the summer season, benefiting from the pilots’ strike at Air France in September and lower than expected fuel costs. Earnings were additionally helped by strong demand for short-haul European travel at the end of the summer, meaning its revenue per seat was better than expected. As a result, the group raised its full-year profit guidance range from £545-570m to £575-£580m. The market welcomed this news with the shares rising 6% in early trading.

“The airline sector is very competitive and several are adding capacity by increasing the number of planes and routes at the moment. However, the effective management team, led by CEO Carolyn McCall, has successfully refined the company’s no-frills approach. We continue to recommend investors ‘hold’ EasyJet due to its strong trading position, the falling oil price and the prospect of increased dividends.”