Soaring back into the fore, easyJet shares take off for the horizon

In this article, I’ll outline at what price and why I’d want to buy more easyJet shares as a happy holder of the stock already.

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Young female couple boarding their plane at the airport to go on holiday.

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There are several different stock options that are just too good to ignore. To elaborate, I’m talking about companies with solid backbones of cash, sit in vital sectors, and have been forced down due to a combination of inflation, Covid-19 hangover and interest rates on the rise. Today, I’m focusing my attention on easyJet (LSE:EZJ) shares.

Stow all tables and make sure you’re in an upright position

During the first few weeks of this year, air traffic in and around Europe has reached 83% of what it was in 2019, with the majority being low-cost carriers. easyJet’s holiday arm generated £13m profit, up from a £1m loss a year ago, indicating a peripheral shift in travel across the region. 

Whilst easyJet recorded another loss of around £130m, I must keep in mind this was a £100m improvement from a year earlier. Additionally, with tasty growth in passenger numbers (47%), the company reported revenue per seat growth of 36%. Coupled with the additions from add-ons, the engine is beginning to get going. On top of this, demand from British holidaymakers is on the up and up, with 60% of its summer holiday targets already sold.

Keep your seat belt fastened in case of turbulence

The taxiing time for easyJet to get going has been touch-and-go for investors. Daily flight numbers are still not what they were in 2019, currently around the 60% mark.

Some would claim lousy luck as a factor here, with two of easyJet’s main transport hubs — London Gatwick and Amsterdam — imposing localised capacity restrictions to handle summer increases in activity, with Amsterdam’s set to continue until April of this year.

easyJet is a company I have personally been watching since the 2019 pandemic; the price dropped from £1,320 per share down to £343, a fall of 73%. It recovered 163% through mid-2021 before inflation, a second Covid-19 scare and a drop in consumer appetite forced the share price down to £275, another 70% drop. Granted, I wasn’t able to jump in here,  but I was able to get in at £320. The shares are currently up 61% from this low.

No longer a round trip but one-way direction

The significant factor standing in front of the aviation industry is the global transition to sustainable fuel sources. Electricity isn’t an option, so it will be hydrogen — specifically green hydrogen. easyJet is one of the few aviation firms that has been receptive to this move, running test flights and providing positive rhetoric towards the transition.

Barring a change in situations, I would look to increase my holdings in easyJet if the shares dipped down to around the £456 mark. However, looking to the rest of this year and growing demand, easyJet has set its ascent on the horizon.

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

Alex Vinder has positions in easyJet. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

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