There has been a fair amount of good news for the airline industry this year. That has made scant difference to easyJet though. The easyJet share price has fallen 12% so far in 2025, during a period when the broader FTSE 100 index (of which it forms part) has risen by 18%.
That is not necessarily reflective of an industry-wide trend. BA parent International Consolidated Airlines Group is up 29% this year.
That said, the easyJet share price has not done as badly as rival Wizz. Its share price has fallen 19% so far this year.
Still, given that aviation demand remains buoyant, could easyJet be poised for a share price recovery?
Solid performance
Last week saw the release of easyJet’s full-year numbers. I felt they spoke to a business in good shape.
Revenue was up 9%, partly helped by a particularly strong showing in the company’s package holidays business. It saw revenues grow by over a quarter.
Pre-tax profit increased 9% and net cash more than tripled to £0.6bn. Overall, then, the airline had a solid year financially.
Why, then, has the easyJet share price been languishing?
Outlook remains rosy
One thought might be that investors expect aviation demand to get weaker over time.
This was not apparent from easyJet’s final results, however. It expects to grow its capacity.
One risk is inflation. The airline has said that cost and operational efficiencies as well as favourable fuel prices ought to help it offset some of the impact of inflation.
Still, I think part of the poor share price performance this year can be pinned on ongoing investor concerns about how robust demand for civil aviation will prove.
With the economy sluggish in many European markets and households increasingly cutting back on discretionary spending, there is a risk that easyJet could see passenger numbers fall.
One to consider
Still, such a risk seems more than priced in already.
Currently, the easyJet share price-to-earnings ratio is just eight. That looks cheap to me, especially given the company’s improving net cash position.
The company has a proven business model and attractive balance sheet. Its package holidays business is growing at a rate of knots and I think that could continue in years to come as it remains a modest player in the market overall.
The company has a well-developed brand, extensive route network, and large pool of repeat customers. It keeps a keen eye on costs and has been able to move beyond its pandemic-era woes to become profitable and cash generative.
Last week it announced a 9% increase in the dividend per share. If the company’s pre-tax profit keeps growing, I expect to see further dividend growth.
To me, the share price looks attractive.
Whether or not it rebounds may depend on wider factors, such as what happens to civil aviation demand. But I do see easyJet as a share for investors to consider.
