Easyjet set to fly back into the FTSE 100 next week

Easyjet is set to fly back to London’s FTSE 100 index next Monday after a post-pandemic share price resurgence.

The low-cost carrier benefitted from returning demand for travel last year after Covid-era lockdown restrictions were finally lifted and travellers returned to the skies.

It will replace Endeavour Mining on London’s premier index, per the latest three-month shuffle, and it has been some journey back to the top flight.

Easyjet had tumbled into the FTSE 250 after its market cap was pummelled at the start of the pandemic, falling from £6.7bn to £2.3bn as global fleets were grounded.

But over the last 16 months, it has more than doubled from £2bn to £4.2bn. Shares in the carrier are up over 13 per cent in the last 12 months.

The firm, which has its headquarters at Luton Airport, reported a string of stellar results in 2023. In October, it reinstated its dividend and placed a major order for 157 new Airbus aircraft.

Easyjet made record profit over what was a booming summer in aviation, with pre-tax gains coming in at well over £600m. Its Holidays segment has also performed surprisingly well, and is looking to oust the likes of Tui and Jet2 with a 10 per cent medium-term market share.

And now earnings are forecast to grow 13 per cent per year, faster than the industry average of 5.5 per cent.

Headwinds do remain for the airline industry, and Easyjet investors showed some restraint in backing the carrier even after last year’s bumper results.

Conflict in the Middle East and Ukraine has disrupted regional airspaces and caused a slew of route cancellations. Shares at a slew of budget airlines dipped in November when Hamas attacked Israel, while oil prices also rose, bumping up the cost of jet fuel.

Gatwick, Easyjet’s primary hub, has also struggled more than other UK airports with air traffic control issues, primarily due to poor staffing.

Yet travel demand, the key factor behind Easyjet’s recovery, still shows no signs of abating. Thats despite ongoing macroeconomic difficulties, rising air fares and a slower than expected revival of business trips.