Hobson: Airline Stocks Are Too Turbulent

THE WEEK: Morningstar columnist Rodney Hobson reveals why he doesn't buy shares in companies like Ryanair and easyJet

Rodney Hobson 27 July, 2018 | 3:08PM
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That was quite a litany of excuses that Ryanair (RYA) chief executive Michael O’Leary trotted out to explain why the airline saw profits plunge 20% in the April to June quarter. Those who have suffered from past contempt for passengers may think it serves him right, but let’s stick to the investment perspective.

Some issues are specific to Ryanair, particularly the problems caused by pilot strikes and ensuing compensation claims. Of greater concern is the admission that fuel costs have risen, strikes by air traffic controllers have deterred passengers from flying and there is increased competition on European routes. That affects everyone, particularly EasyJet (EZJ) but also IAG (IAG), owner of British Airways.

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The information contained within is for educational and informational purposes ONLY. It is not intended nor should it be considered an invitation or inducement to buy or sell a security or securities noted within nor should it be viewed as a communication intended to persuade or incite you to buy or sell security or securities noted within. Any commentary provided is the opinion of the author and should not be considered a personalised recommendation. The information contained within should not be a person's sole basis for making an investment decision. Please contact your financial professional before making an investment decision.

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar
British American Tobacco PLC2,583.00 GBX-0.65Rating
easyJet PLC593.80 GBX-0.47Rating
Imperial Brands PLC1,563.50 GBX-1.17Rating
National Express Group PLC229.00 GBX2.05
Ryanair Holdings PLC16.04 EUR0.41Rating

About Author

Rodney Hobson

Rodney Hobson  is a columnist for Morningstar.co.uk and author of several investing books, including The Dividend Investor and How to Build a Share Portfolio.