EasyJet Share Price Surges on Falling Oil Prices

on Sep 11, 2013
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iNVEZZ.com Wednesday, September 11th: EasyJet (LON:EZJ) and British Airways parent International Airlines Group (LON:IAG) yesterday were among the top gainers in the FTSE 100 as fading fears of a U.S. strike against Syria helped reduce concerns over jet fuel costs.

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Both carriers were recently hit by high oil prices. Brent crude rose as high as $117.34 a barrel in late August due to market concern that an attack against the Syrian regime would lead to widespread disruption to oil supplies from the Middle East. After Syria yesterday said it had accepted the Russian proposal to place its chemical weapons under international control, thus making a U.S. attack less likely, oil prices retreated.

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The prospect of cheaper jet fuel yesterday boosted the FTSE 100 airlines, with IAG gaining 14.3p to 319.8p, while easyJet jumped 7.2 percent, or 91p, to 1,358.00p – its biggest rise since May 15 – to lead gainers in the blue-chip index.

**Budget Travel**
Yesterday, easyJet’s Chief Executive Officer Carolyn McCall said in an interview for Bloomberg that network carriers could surrender to easyJet 86 million short-haul passengers who travel from Europe’s 20 biggest airports each year as they don’t feed lucrative long-haul services.
“I don’t see why any legacy carrier would want to continue losing money on short-haul when it can be done better by other carriers, except to feed their long-haul,” she commented for the newswire. Both easyJet and rival Ryanair predict that established airlines are doomed to fail in their efforts to maintain intra-European routes.

!m[Former Flag Carriers Could Surrender Millions of Passengers to easyJet](/uploads/story/5399/thumbs/pic1_inline.jpg)
Carolyn McCall also highlighted that easyJet has benefited from austerity measures in large parts of Western Europe because its no-frills model attracts travellers who are unwilling to sacrifice their holiday.
EasyJet, which has expanded its fleet from two planes in 1995 to more than 200 Airbus SAS aircraft, serves almost 60 million passengers a year. An order for additional 135 Airbus A320 single-aisle jets valued at $13 billion was approved in July in line with McCall’s strategy and putting the company on track to increase seat capacity by between three and five percent a year.

EasyJet share price has jumped 77 percent this year, which makes the stock the third best performer on Bloomberg’s World Airlines Index, which comprises 32 companies. The company is currently valued at about £5.38 billion. In March it entered the FTSE 100 Index, joining British Airways and Ryanair, Europe’s largest discount carrier.
After yesterday’s considerable gains investors traded easyJet shares 1.1 percent lower this morning in London.
**As of 10.42 BST buy easyJet shares at 1,338.00p.**
**As of 10.42 BST sell easyJet shares at 1,336.00p.**

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