Airline shares have regained some footing following an upbeat summer booking assessment issued by easyJet.
A few days after a Ryanair warning of demand and the need to step up discounts, easyJet said its prices had remained stable on average compared to last year and there were no signs of a decline in bookings during the summer peak.
Its shares rose 8% on the news, while aviation rivals also posted gains after widespread losses on Monday linked to Ryanair’s performance and prospects.
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EasyJet raised the full-year profit forecast for its holidays division after reporting a 16% rise in the group’s third-quarter pre-tax profits to £236m.
Chief executive Johan Lundgren told reporters: “We remain on track to deliver another record summer, which takes us one step closer to our medium-term targets.”
Regarding the current market view, he added: “We will have some parts of the network and some flights cheaper than… last year, but some would be a little more expensive.
“But on average, the tariff environment is very similar to what we saw last year.”
The upbeat tone contrasts, however, with industry-wide concerns that ticket and holiday prices are driving away customers as budgets continue to be strained across Europe by cost-of-living pressures.
EasyJet said its summer flight schedule was 69% booked, but declined to give a specific profit forecast beyond saying the outlook was positive.
Shares in Ryanair rose 2%, while Wizz Air and BA owner IAG saw similar recoveries.
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John Moore, senior investment manager at RBC Brewin Dolphin, said: “Ryanair’s results earlier in the week cast a shadow over airlines, but easyJet’s performance should provide a level of reassurance that conditions are not necessarily bleak. across the sector.
“Profits and bookings remain on a positive trajectory, while its easyJet Holidays offering is contributing even more significantly to the company’s bottom line.
“Concerns about the longevity of the post-COVID travel boom are likely to hang over airlines for some time yet – easyJet is down -15% year to date.
“But today’s results demonstrate that easyJet is in a better position than many of its peers and should be able to weather this turbulent period.”
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