As the Dow tops 16,000 for the first time you have to wonder how we got here and what the future holds. Major stocks do not appear to be seriously over-valued, but matters are more to do with the huge number of IPOs running through the markets across seemingly all sectors. So do we need to watch out for a bubble that is about to burst? You will need a crystal ball for that one, but of course airlines are future-looking by nature and one must consider everything.
EasyJet's annual profits were up 51% today right where they said it would be a few weeks ago, more than 60 million passengers flew easyJet in the last 12 months. Profits were up to a new record high of £478m in the year to September 30, up from £317 million - while easyJet offered yet more cheer to investors as it revealed plans to hand out a £175 million windfall to shareholders through a special dividend payment. So did you buy easyJet as we advised two years ago? If you did then, as mentioned the other day, this looks like the top.
EasyJet targeting business travellers and gaining a 4% share of that market with 10m business passengers is part of the story but it is also about the airline benefiting as other airlines around it have cut their routes and frequencies. The leap in passengers is also in part due to the London Olympics fillip that was enjoyed in the latter months of 2012. Bookings for H1 2013/14 are flat on last year while problems at Gatwick airport with 152 flights cancelled this quarter will affect income at a time when airport charges are increasing. EasyJet is forecasting a 5% full year increase in passengers, which looks ambitious.
Meanwhile Allegiant is being lambasted for its credit negative $2.25 cash dividend and share buybacks at a time when it is running one of the oldest fleets in the business while George Soros has sold his holdings in both United and Delta as he calls time on the only airline stocks to grace his portfolio.
While Iran Air is ready to resume direct flights from Iran to the United States, Flights are likely to be carried out with 747s and is likely to be a resumption of the old New York route. Watch that space.
Over in India SpiceJet is readying to purchase up to 50 737 Max aircraft. SpiceJet is expanding its international operations to offset FX hits by increasing USD earnings and the airline is set to announce flights to Bangkok, Dubai, Sharjah, Dammam (Saudi Arabia) and Riyadh in the coming weeks.
Now we cannot leave you today without confirming that Al Baker has done it again at the Dubai Air Show – he has verged on giving away pricing information on a deal. When our man grabbed him he confirmed that Qatar and Emirates negotiated jointly on the 777X deal and they got substantial discounts as they pushed for the same in return for a large order to kick off the program.