The price of EasyJet stock is declining to its lowest levels since the 2020 pandemic crash as a big wave of flight cancellations has spooked investors while the firm just announced today that its Chief Operating Officer has departed in the midst of the chaos.
According to a statement released by the company hours ago, effective on 1 July, Peter Bellew resigned “to pursue other business opportunities”.
Mr. David Morgan, the firm’s former Director of Flight Operations, will be replacing Bellew temporarily and will be reporting directly to the firm’s Chief Executive Officer, Johan Lundgren.
EasyJet stated that Morgan has been with the company for 6 years now. At some point during that period, in 2019, he also acted as interim COO.
“Everyone at easyJet remains absolutely focused on delivering a safe and reliable operation this summer”, Lundgren stated in regards to the leadership change.
He added: “I am pleased that Operations will be in the very capable hands of David Morgan who can move seamlessly into this role having previously led the operation, as interim Chief Operating Officer, throughout 2019”.
Strikes and Staff Shortages Threaten to Cause “Unprecedented Chaos”
Employees from EasyJet have scheduled strikes in three separate dates starting on 1 July. A total of 450 Spanish workers have been claiming a salary increase since February and have reached an impasse with the company in recent days during one of the busiest times of the year for the airline – the summer season.
Workers within the European country claim that they earn nearly €850 less than their German and French colleagues and the union has taken action by scheduling protests in three different airports at Barcelona, Malaga, and Palma de Mallorca.
As a result, hundreds of flights have been affected and, even though the company has assured passengers that they should be able to rearrange their itineraries for a maximum delay of 24 hours, it is unclear if the company will manage to live up to that promise.
To avoid further disruptions, the company has already reached an agreement with its German union that involves a salary increase for cockpit and cabin crew along with a one-time payment of approximately €4,500 ($4,700).
News portal iNews also published a letter from a group of the company’s pilots based in France who warned that these actions along with the already worrying staff shortages the company was experiencing could lead to some “unprecedented chaos”.
“We are actually convinced that our disruption hasn’t even peaked yet and frankly this is a frightening prospect”, the letter stated.
The head of the SNPL pilot union in France, Arnaud Wiplier, stated that the pace at which flights are being cancelled at this time is something he has not seen in the past 10 years at least.
The resurgence of the COVID-19 virus in various corners of the European Union has contributed to reducing EasyJet’s available staff as many workers have called in sick.
“If one person is off sick, there is only one left who can assess the next day’s flight schedules throughout Europe, so we have cancellations that are made late because we realise too late that there are not enough crew members”, Wiplier stated.
EasyJet Stock Has Dropped 35% Since 2022 Started
Shares of EasyJet are declining 4.4% today at 360.3p. Thus far in 2022, the stock accumulates a 35.2% drop as macroeconomic conditions in the region have deteriorated in the form of higher inflation while geopolitical tensions resulting from Russia’s invasion of Ukraine have also weighed on the performance of the airline stock.
In addition, jet fuel prices have skyrocketed this year due to the sanctions imposed on Russia for its military actions against the European country led by Volodimir Zelenski.
The Jet Fuel Price Index compiled by the International Air Transport Association (IATA) has risen nearly 84% since the year started. This adds tremendous pressure to airlines as they are forced to raise the cost of flight tickets. This could reduce demand in the near term and could have a dramatic impact on the financial performance of these firms.
Other Related Articles:
- Quick Guide to Invest in Oil Stocks
- Investing in Dividend Stocks for Beginners
- Investing in 5G Stocks – How Does it Work?
eToro CopyTrader™ Tool
- Buy Crypto & Copy Trade Professionals
- Copy a DeFi or Metaverse Portfolio
- Free to Use, Automated Trading
- Mimic From 1 - 100 Traders