Good morning!
It's a positive morning for airlines, with positive news as follows (briefly, as they're not small caps);
easyJet (LON:EZJ)
This share is up 6% this morning to 1774p on a trading update which outlines strong UK summer trading (for August especially) for European beach & city destinations - late demand being presumably driven by mostly poor weather in the UK during August.
Easyjet's profit guidance range for y/e 30 Sep 2015 has been raised from £620-660m to £675-700m.
Incidentally, why can't all UK listed companies (regardless of size) publish their profit guidance range to the market, and update/narrow it as the year progresses? This is surely the best way to manage investor expectations. Even if the range was very wide for small caps, it wouldn't matter. Surely it's better to say that we expect to deliver profit of £1-2m at the shart of the year, then narrow it to say £1.5-2.0m midway through the year, and then close in on a firm figure towards the end of the year? That makes far more sense than giving a single estimate via the house broker, which then constitutes a profit warning if it's moved down. Far better to give a range surely?
Easyjet's load factor is impressive, at 94.4%, so they're almost filling their planes. I'm not surprised - the prices are keen, service is generally good I've found, and the fleet of planes are new and in good condition. So I like flying Easyjet, apart from when the flight is disrupted by noisy Stag parties - something needs to be done about that - a zero tolerance approach in my view. Also their cabin baggage policy is ridiculous - people bringing on small suitcases & trying to ram them into the overhead lockers, really slows down the embarkation process, and causes friction & stress on board as there isn't enough space.
Dart (LON:DTG)
This airline/travel/haulage group has also put out a positive announcement today, propelling the shares up 10% to 486p this morning. The shares were starting to look expensive, but that now appears to be justified from positive trading.
In a way, the PER doesn't necessarily indicate whether a share is expensive or not. It is just telling us what the market's current growth expectations are. That's fine as long as a company achieves growth which…
