‘Encouraging’ passenger data elevates airlines as UK stocks end turbulent week
Passenger data from two popular low-cost European airlines released on Friday showed a marked increase in the number of travelers in June, giving an encouraging boost to the outlook for a recovery in the travel industry and helping airline stocks to rise.
Ireland’s Ryanair said it carried 5.3 million people in June 2021, up from just 400,000 in the same month of the previous year. Hungary’s Wizz Air said its 1.6 million passengers last month were up from 500,000 in June 2020. The shares of both companies are listed in London.
“Airline stocks have done their best to skyrocket following encouraging industry figures,” said Russ Mold, analyst at AJ Bell. “Wizz Air managed to fill almost two-thirds of its seats on in-service planes in June, while Ryanair carried nearly three times as many people this month as in May.”
Ryanair RYA shares,
increased by almost 2.5% while Wizz Air WIZZ,
the share rose 2%, while EasyJet EZJ,
was another airline whose shares took the updraft of positive passenger data.
“Under the circumstances, these are positive numbers. However, the airlines business model is based on filling planes to capacity or capacity and then charging extra for everything from early boarding to bag storage, ”Mold said.
Read also : European stocks rise ahead of US wage data, ending trading week marked by concerns over delta variants
“The industry needs a continuous flow of people at airports and the ongoing Covid restrictions imposed by various governments around the world mean the industry is still far from functioning properly,” the analyst added.
The airline news met a very mixed trading day in London, with the FTSE 100 UKX,
—The index of major UK stocks by market cap — ending the day just below zero.
Major European stock indexes have had a turbulent week as the region has been rocked by growing concerns over the delta variant of COVID-19, which has led to the imposition of new travel restrictions in the region. The new restrictions include those from Spain, Portugal and Malta for travelers from the UK, where the variant is prevalent.
But analysts noted that stocks took it in stride and were expected to end the trading week same or slightly higher than Monday.
More: Here’s how different countries handle arrivals from Delta Variant Access Points
And: Here’s how the delta variant could impact markets and what to do, says JPMorgan
“It has been a testing week for investors, with the markets going through a few tough days,” said Mold. “Fortunately UK stocks are well on their way to recouping all of the week’s losses, showing that it can pay off to keep your cool when it comes to investing. Patience is essential.
Mold noted that much of the strength of the FTSE 100 came from pharmaceutical and consumer goods companies.
GlaxoSmithKline GSK shares,
rose nearly 1% before slashing gains to settle almost flat. The British pharma giant has rejected a proposal by activist investor Elliott Management, made yesterday, to shake up its board of directors and start a process that would put the future of its CEO, Emma Walmsley, at risk. GSK also announced that it has partnered with the American group Alector ALEC,
to develop two drugs for the potential treatment of Alzheimer’s disease and other neurodegenerative diseases in a deal worth up to $ 2.2 billion.
The stock rose 3.2% after the publishing and events group’s shares were revalued by investment bank Berenberg.
Oil prices have slipped from their highs, with the benchmark Brent BRN00,
crude down slightly after crossing the $ 76 per barrel mark. Shares of oil majors listed in London BP BP,
and Royal Dutch Shell RDSA,
fell in parallel.
Banks also added weight to the FTSE 100, with shares of Barclays BARC,
and NatWest NWG,
all of them trade more than 1% down.