The low-cost airline announced today that they’d hit record profits for the 5th straight year. However with the FTSE 100 up over 1.5%, EasyJet is only 1 of 3 stocks currently trading lower in the index. In fact, it is lower by 2.2% at 1740p. The question is why? Well, the stock market is a forward pricing mechanism and investor’s expectations are downbeat. After the terror attack in Paris on Friday, not to mention the Russian Airplane which was allegedly downed a couple of weeks ago, most airlines are coming under increasing pressure. However I am a little surprised with the market’s reaction as EasyJet’s expectations were positive, so much so that they announced the purchase of 36 more airplanes. Making such a commitment shows that despite the troubles the airline industry may face in the wake of such terror, it believes it can and will fill its planes with willing passengers. Eventually, society will get past the horrific terror attacks, as will the airline industry. In my opinion, the biggest challenge I see for EasyJet is whether it can challenge Ryanair for the no. 1 budget airline tag. If these figures are anything to go by it is getting a lot closer.

Good luck,

Vinay Sharma, Senior Trader



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