On the Beach’s Post

What's New to The Street... ✈ easyJet’s Flying High! ✈  easyJet has announced a dividend hike after delivering a 34% rise in headline pretax profit, excluding exceptional and one-off items. 🚀💼 Strong performance and soaring earnings make this a win for investors!  Are you bullish on easyJet’s growth? Share your thoughts below! 👇✨ 👉🏻Follow New To The Street for more! #easyJet #AviationNews #BusinessGrowth #DividendBoost #StockMarketUpdate #TravelIndustry #Innovation #Businessupdate #Businessnews #Business #News #Newtothestreet

Recent results from low cost carriers have drawn attention to the business model. Many of them appear to have been struggling as traffic growth has slowed following the recovery. I’ve seen speculation that this is due to increased non-fuel costs and certainly, such rises must play their part, but there has also been plenty of pointing at seat capacity rising quicker than traffic and the effect that this must be having on fares. Here is a great article focusing on Ryanair and comparing it against Wizz and easyJet among others…

Wizz Air's downgrade reflects our expectations that EBITDAR net leverage and fixed-charge coverage will not be consistent with the rating sensitivities for a 'BBB-' rating for FY25-FY27. Prolonged P&W engine issues have impacted capacity growth and increased costs, leading to higher debt and leverage. However, the Stable Outlook is supported by an anticipated 26% EBITDAR margin, strong compared to airline peers, and our assessment of the company's deleveraging potential, driven by anticipated growth in profitability from new fleet additions and positive free cash flow (FCF) expected from FY26.

Europe’s airlines all suffered during the pandemic, but in the low-cost segment Ryanair has been by far the fastest to bounce back. The Irish company’s stock may have dipped on its annual results today, but since February 2020 it’s up 14%. In the same period, Wizz Air is down 55%, while easyJet is down 72%. Why the divergence? Two main factors come to mind. The first is fundamental: Ryanair is very good at keeping costs down, which helped it shrug off the lockdown-induced downturn and invest in growth afterwards, including adding over 100 aircraft to its fleet. The other factor was the result of Ryanair CEO Michael O’Leary’s decision not to lay off staff in 2020, unlike most competitors, who subsequently struggled to fill vacancies when travel rebounded. Rivals like easyJet can catch up, but with Ryanair growing rapidly—30 years after O’Leary took over—it will be tough. https://lnkd.in/daWFJKVU

The unsolicited Corporate Issuer Rating of BBB attests Ryanair a highly satisfactory level of creditworthiness and a low-to-medium default risk. This assessment reflects our view that the industry continues to show signs of improvements, favoring stronger cash generation in the coming years. Additionally, Ryanair is experiencing growth with the expansion of its fleet with annual passengers expected to grow to 250 million by 2030. The continued growth is also evidenced by the positive operational and financial performance in 9M FY24, in which operating earnings increased substantially year-over-year. This adds to the fact that the company has built up an exceptional liquidity profile and a strong balance sheet, with its cash balance being more than enough to cover its total financial debt, and creating greater financial flexibility to execute its growth investments. The following considerations were of specific relevance for the rating assessment: ➕ 9M 2024 revenues and profit up substantially due to higher air fares and increasing passenger volumes ➕ Fuel hedging extended to 65% at 79/bbl for the 2025 business year ➕ European aviation capacity to remain constrained over the next year; positive impact for pricing expected ➕ Substantial increase in capital expenditure, which is expected to fall over the coming years ➕Liquidity still strong despite a slightly lower cash position following significant cash outflows for capital expenditure and a bond repayment ➖ Q3 2024 profit significantly diminished due to sharp rise in fuel prices #creditreform #Rating #ryanair

What's New to The Street... ✈ easyJet’s Flying High! ✈  easyJet has announced a dividend hike after delivering a 34% rise in headline pretax profit, excluding exceptional and one-off items. 🚀💼 Strong performance and soaring earnings make this a win for investors!  Are you bullish on easyJet’s growth? Share your thoughts below! 👇✨ 👉🏻Follow New To The Street for more! #easyJet #AviationNews #BusinessGrowth #DividendBoost #StockMarketUpdate #TravelIndustry #Innovation #Businessupdate #Businessnews #Business #News #Newtothestreet

EasyJet ups dividend on surging profits from ‘record breaking’ summer EasyJet shares increased by 2% on Wednesday as the low-cost airline reported a 34% increase in its pre-tax profits

The fastest-growing part of International Airlines Group (IAG), and the most dependable earner, is not flying people business class on British Airways, but its loyalty division, IAG Loyalty. In the first six months of the year, it boosted its operating profits by 13 per cent to £193 million, pipping the resurgent British Airways, the largest part of the group where the profits were 11 per cent higher. IAG Loyalty was the group’s cash cow, in the first quarter of the year, traditionally a tough trading period for European airlines according to The Times, with profits of £80 million, larger than any other division. "It appears to be a win-win-win operation. IAG makes money from an asset-light business and, unlike an airline, it is non-seasonal, with the cash rolling in all year round. The partners like the model because issuing points drives loyalty to their own brands. And punters love it because it buys them an experience seemingly for free." https://lnkd.in/exVXmqgH

The affirmation reflects Ryanair's robust financial position, underpinned by its low gross leverage and sustained net cash position, despite ongoing challenges such as higher operational costs and recent pricing pressures in the European airline sector. The company continues to expand its capacity, with new routes and fleet additions, but the lower fare environment poses a challenge to maintaining the high profitability achieved in the last two years and limits the rating upside to 'A-'.

🚀 IAG Loyalty: The Real MVP of IAG ✈️ | Should Fashion Retail Loyalty Programs Adopt This Model? My colleague, Evert de Boer, a leading expert in airline loyalty programs, has highlighted the impressive growth of International Airlines Group (IAG)'s loyalty division. Here are the key points from his analysis: #KeyHighlights: 1. 💹 Profit Surge: In the first six months, IAG Loyalty boosted operating profits by 13% to £193M, surpassing British Airways' 11% increase. 2. 💰 Cash Cow: In Q1, traditionally tough for European airlines, IAG Loyalty earned £80M in profits, more than any other division. #WhyItsWinning: 1. 📆 Year-Round Revenue: Non-seasonal revenue ensures steady cash flow all year. 2. 🏢 Asset-Light Model: Profitable without high airline costs. 3. 🤝 Mutual Benefits: Partners gain loyalty, and consumers enjoy seemingly free rewards. "It appears to be a win-win-win operation," says Evert. "IAG makes money from an asset-light business and, unlike an airline, it is non-seasonal, with the cash rolling in all year round. The partners like the model because issuing points drives loyalty to their own brands. And punters love it because it buys them an experience seemingly for free." --- #DebateTime! 💬 Evert's analysis opens a thought-provoking question: Should other sectors, like fashion retail, adopt this model? Fashion retail loyalty programs are less mature compared to the airline industry's miles programs. Here are some points to consider: #Pros: 1. 💼 New Revenue Streams: Creating a dedicated loyalty division could turn these programs into profit centers. 2. 🛍️ Enhanced Customer Loyalty: Reward systems could drive increased customer engagement and brand loyalty. 3. 💸 Non-Seasonal Income: Similar to airlines, fashion retailers could benefit from year-round revenue. #Cons: 1. 🎭 Brand Integrity: Over-commercializing loyalty programs might dilute the brand's image. 2. ⚙️ Complexity: Implementing and maintaining such programs can be resource-intensive and complex. 3. 🧐 Customer Perception: There’s a risk of customers feeling manipulated or exploited, which could damage the brand's reputation. What do you think? Can fashion retailers successfully transform loyalty programs into profitable business units without compromising their brand integrity? Share your thoughts! 👇 #IAG #AviationNews #LoyaltyPrograms #BusinessGrowth #CustomerLoyalty #FashionRetail #BrandStrategy