Easyjet shares: Price analysis before buying or selling

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ISIN code: GB00B7KR2P84

Ticker: LON: EZJ

Index or market: LSE

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Elements to consider before selling or buying Easyjet shares

Analysis N°1

We would notably suggest following the development of training for future Easyjet employees that use the academy created by the group as well as the supplementary revenue generated by it.

Analysis N°2

We would also recommend following the development of supplementary services offered by the airline company such as the rental of hotel rooms or the sale of tour package holidays.

Analysis N°3

The rental services of the Easyjet airline fleet during the less volatile periods of its activity are also major indicators.

Analysis N°4

Any change in the government policies or airline regulations could also have a major impact on this group’s activities.

Analysis N°5

It is recommended to also monitor the competitors to this group and in particular the development of the low price flight offers of the major airlines in this sector.

Analysis N°6

Finally, the implementation of new destinations for this company’s flights should be closely followed.

Analysis before buying or selling Easyjet shares

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General presentation of Easyjet

The EasyJet Group is currently one of the major budget airlines in Europe. Although the vast majority of its turnover is derived from passenger transport with over 64 million passengers in 2013/2014, representing 98.6% of the turnover, it also offers baggage services, restaurant services, car rental and others.

The current fleet of this company totals 226. EasyJet makes the majority of its profits through the United Kingdom as well as Northern and Southern Europe.

Contrary to certain other airline companies, EasyJet is a ‘low cost’ company with a ‘Buy On Board’ strategy. Therefore all the services normally included with the flights of classic airline companies such as hold baggage, on board meals, or even flight changes are payable with EasyJet. With this system, EasyJet can make savings and offer attractive prices for its air flights.

In any case, EasyJet has also implemented a new range of fees since 2012, called ‘Flexi Fare’ which includes certain services such as checked luggage, priority boarding access and limited free flight changes. This is to compete with the other standard flight companies.

EasyJet of course offers a payable in-flight restaurant service as well as a duty free range of products. It is therefore possible to purchase sweet and savoury snacks, alcoholic and non-alcoholic drinks, perfumes, cosmetic items, travel accessories and children’s toys and souvenirs. The prices for these items and services are available in the in-flight brochure. Each month ‘The Traveller’ in-flight magazine is available to flight passengers free of charge.

The price of EasyJet shares is currently quoted on the Main Market of the London Stock Exchange and is included in the calculation of the FTSE 100 stock market index.

Photo credits: ©dacosta/123RF.COM

The major competitors of Easyjet

We now take a look at EasyJet's main competitors with a quick overview of each of the major players operating in the same segment with their activities and key data.

Ryanair

Firstly, the low cost airline Ryanair which is an Irish company and the leading airline in Europe in terms of the number of passengers carried. The company is mainly based in Dublin, London and Charleroi.

Norwegian Air Shuttle

This Norwegian low-cost airline was, at the time of its strongest development, the third largest European low-cost airline after EasyJet and Ryanair and the second largest airline in Norway.

Transavia

This airline, formerly known as Transavia.com is a Dutch low-cost airline and a subsidiary of KLM and thus becomes part of the Air-France KLM group. It is mainly based in Amsterdam but also has bases in Rotterdam and Eindhoven.

Volotea Airlines

This Spanish low-cost airline is based at Asturias airport and its main operational base is at Nantes Atlantique. Volotea operates mainly in France with 45% of its turnover and bases in Nantes, Bordeaux, Toulouse, Marseille and Strasbourg. It employs over 1,300 people in Europe.

Lufthansa

This private German airline is also the leading European airline in terms of the number of passengers carried, ahead of Ryanair and Air France KLM. The company is also a co-founder and European pillar of the Star Alliance. The group also owns the subsidiaries Lufthansa Cargo and Swiss International Air Lines since its acquisition in 2005. The Lufthansa Regional subsidiary controls Lufthansa CityLine and Air Dolomiti.

Vueling Airlines

Finally, the Spanish low-cost airline Vueling Airlines was founded in 2004 and is based in El Prat de Llobregat near Barcelona. The company is part of the IAG group. The group and airline offers 340 routes in Europe, Africa and the Middle East and has 22 bases, 8 of which are outside Spain. The airline's hubs are based at Barcelona and Rome airports and the name of the airline is derived from the Spanish word Vuelo which means 'flight'.

The major partners of Easyjet

And to conclude here are some of the recent partnerships implemented by EasyJet.

American Express

In 2012, EasyJet announced the implementation of a partnership with the American group, American Express, and its business travel branch. The company thereby became one of the major allies of the group for business travel reservations.

Walt Disney

In 2013 EuroDisney of the Walt Disney Group signed a partnership agreement with EasyJet. This resulted in Disney clients being able to directly reserve a flight from this airline to Roissy-Charles-de-Gaulle and Orly from any one of over 50 cities in Europe in exchange for which EasyJet offered theme park entry tickets for sale through its website.

Monacair

In 2017 EasyJet signed a partnership agreement with Monacair to assist passengers destined for Monaco to take advantage of air connections from Nice to the principality.

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The factors in favour of a rise in the Easyjet share price:

To enable you to refine an investment strategy on the Easyjet share price, particularly if you plan to invest in this asset over the medium to long term, you should examine this company’s growth capabilities. To do so, we recommend you particularly compare the strengths and weaknesses of the Easyjet Company which represent a basic element in the strategy of numerous traders. Let us start here with a presentation of the various strong points of this group before examining its weaknesses.

The first great advantage of the Easyjet Group is in fact related to its name. This was actually reached after a great deal of reflection and was chosen to be easy to remember by its clients in all the destination countries whatever their native language. This brand name also offers an important reminder that enables the group to benefit from a strong reputation and maximise the impact of its communications strategy.

Another advantage of the Easyjet group also concerns the fact that this airline company serves a large number of destinations. It thereby enables visitors to travel to most major European destinations and is therefore a first choice flight company. In fact, Easyjet still continues to widen its range by regularly adding new destinations.

Still on the subject of this company’s advantages from a strategic point of view we can also note that this company only uses one particular model of aircraft. This notably enables the company to significantly reduce its training costs as well as those of maintenance and supervision while still keeping to its profit margins.

One particular point that has enabled Easyjet to become one of the major players in the air travel sector has of course been that it was the first low cost airline company to sell its flights uniquely online. This strategy has enabled the company to reduce the number of its intermediaries thereby enabling it to be more independent and also reduce its distribution costs. Even now the Easyjet website is one of the most popular e-commerce websites for people looking for flights.

Finally, let us conclude this examination of the advantages of Easyjet shares by underlining the recruitment strategy of this company which is original and also highly judicious. Easyjet in fact created its own academy for training its onboard personnel. This strategy notably enables it to easily provide its own pilots and cabin attendants with its employees already involved in the company and directly aware of its policies.

The factors in favour of a drop in the Easyjet share price:

As you have no doubt understood, the Easyjet aviation company displays numerous advantages thus displaying great promise for its future growth and therefore a rise in its stock market share price. However these advantages are not the only elements that you should take into account before starting to speculate on this asset. It is important to also examine the weaknesses of this company as its albeit few disadvantages that we will now examine could exert a negative influence on the growth of this asset’s price.

Firstly, although the group possesses certain advantages over its competitors it also has certain weaknesses. We particularly note the lack of a loyalty programme up to now for its clients as this would enable it to encourage repeat customers over the long term with obvious advantages and thereby reduce the temptation for clients to change to its competitors’ services.

On the other hand, the fact that Easyjet is positioned on the lower price flights sector is also a disadvantage that you should be aware of. The fact that its flight prices are low means that the group has to deal with lower margins threatened by various outside factors such as taxes and supplementary charges imposed by certain governments.

Finally, the last notable weak point of the Easyjet Company this time concerns its strong dependency on its suppliers. The fact that this company trusts only a limited number of suppliers for its airplanes and other requirements does of course present a major risk notably if its suppliers have to face operational problems.

You will note that the disadvantages of Easyjet are actually less numerous than its many advantages. However their weight may be sufficient to impact the price of its shares and you should therefore be able to anticipate their effects on the historical charts and moderate your decisions.

The information supplied here is only for indicative purposes and should not be used without the completion of a comprehensive and complete fundamental analysis of this asset notably taking into account exterior data, future publications and announcements and all fundamental events and news that could influence the strengths and weaknesses or make them more or less significant. This information does not in any way constitute recommendations relating to the completion of transactions or a solicitation to buy or sell an asset.

Frequently Asked Questions

How has the EasyJet share price performed recently?

It can be advantageous for all interested traders to follow the recent performance of the EasyJet share price to be able to anticipate its future movements. We can observe that over the last five years this asset price has displayed a negative performance with a drop of 47.68%. Over three years it lost 40.03% and over a year 5.88%.Over the last six months this share price lost 39.35% and 21.23% over three months but finally rose by 58.06% in the month of May.

How to anticipate future movements in the EasyJet share price?

To anticipate the upcoming trends on the EasyJet share price you should use a technical analysis with the chart indicators available through your online trading platform together with a fundamental analysis particularly concentrating on financial events and announcements as well as all other applicable data from this activity sector that could influence the movements of this share price on the stock markets.

Is it possible to trade in the EasyJet share price on a fall?

Indeed yes! Using certain specific contracts such as CFDs, otherwise known as Contracts for the Difference, it is possible to speculate directly on a drop in the share price of the EasyJet Company. To do so you simply need to take a selling position on this asset. You do not need to actually own this asset to take such a position and therefore you do not need to actually buy these shares beforehand.

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Analysis before buying or selling Easyjet shares