The Easyjet share has dipped from the May reopening euphoria as the reality of the post-covid travel industry became more clear. Despite recent government reassurances, there are still risks ahead for the airline industry.
The UK government has said that the so-called ‘plan B’ return to restrictions will not be imminent, despite the calls from opposition parties. Those calls were followed by research that said UK cases will fall to 5,000 per day by Christmas. Surprisingly, Easyjet got no boost from that news and that is a worry for the shares.
The reason that airlines are still under pressure is that despite the UK reopening, other countries are stalling, or going backwards. This week we saw the Spanish tourist destination of Benidorm blaming UK travellers for a spike in cases. Benidorm has logged over 200 cases per 100k inhabitants but said that over 50% were from the UK. This puts the vaccination programs into question because visitors were unable to arrive without proof.
This could be an ongoing problem as the cold weather continues in Europe and there is also a risk of a further strain after talk of a ‘Delta Plus’.
The price of Easyjet shares have settled above the $600 level and are now looking for the next catalyst. The $700 level is resistance for a move towards the recent highs above $900, however the price action is weak and a move below $550 would head for the $400 support from late-2020, which marked the last virus turmoil.
This post was last modified on %s = human-readable time difference 15:08