Budget airline easyJet PLC slipped by over 4% on Thursday, despite unveiling ambitious plans to increase its fleet size and score pre-tax profits of £1 billion in the medium term.
Updating on the back of record summer trading, easyJet said full-year headline profit before tax would come in between £440 million and £460 million.
Plans to purchase up to 270 new jets from Airbus Group (EPA:AIR) from 2028 were also unveiled, in what chief executive Johan Lundgren said was a bid to drive growth and modernisation.
However, analysts were not entirely convinced by the report, with investors also having developed cold feet, prompting shares lower after the seemingly positive update.
Questions over the increased cost of living remain, RBC Brewin Dolphin senior wealth manager John Moore said.
Higher interest rates could weigh in too, he added, likely impacting people’s holiday plans towards the end of the year.
Third Bridge analyst Olly Anibaba echoed this sentiment, raising doubt over whether the boom in short-haul travel demand would actually continue into next year.
“Our experts believe competition is going to intensify as other airlines look to expand their network to popular leisure destinations,” he commented, also pointing to higher fuel costs.
“To get through the short-term turbulence, easyJet must remain focused on tight financial metrics and re-enforcing brand reputation,” Moore tipped.
“[This] is a difficult balancing act," he continued, “as customer ire at flight schedule changes shows only too well.”
Shares were down 4.10% at 418.90p on Thursday afternoon.