EZJ: Downgrade to SP: Stock now in special sits territory

Research evidence excerpt

EZJ: Downgrade to SP: Stock now in special sits territory

easyJet PLC

Key fundamental questions

Our view

How do we view the outlook for the We see the supply-demand balance as an important driver of airline prospects.

airline sector? There are currently a number of capacity constraints such as aircraft availability

limiting European airline capacity over the remainder of the 2020s.

How do we view easyJet's strategy? We see easyJet's Holidays business as a sensible way of monetising the company's

brand and leisure-focused network, and likely to support the company's ROCE/ ROIC.

Upgauging to lower unit cost aircraft should help mitigate industry-wide ex-fuel unit

cost pressures.

How do unit costs compare to peers? easyJet is positioned between IAG and Wizz Air/ Ryanair on a cost per passenger

basis, and closer to IAG on a CASK basis. easyJet's strong position at capacity-

constrained airports helps limit risks from ultra-LCC competition.

Key sustainability questions

This section is intended to highlight key sustainability discussion points relevant to this company, as well as our views on the outlook. Both the

questions we highlight and our responses will evolve over time as the dialogue between management, analysts and investors continues to

advance. We welcome any feedback on the topics.

What are the social/ sustainability Airlines, and particularly low-cost carriers, have improved connectivity and made

credentials of the air transport travel affordable to more people. However, air transportation also involves higher

sector? emissions per traveller/ distance travelled than most forms of transportation. More

fuel efficient aircraft, and increased use of sustainable aviation fuels can reduce

environmental footprint of air travel over time.