Ryanair Holdings PLC (LON:RYA) saw its shares rally slightly today as the discount airline bowed to pressure and published online a list of all the cancellations it plans over the next six weeks due to staffing issues.
Jordan Hiscott, chief trader at ayondo markets pointed out: “Two days ago the firm revealed that it was cancelling almost 50 flights a day, possibly for the next six weeks, due to the mismanagements of pilots’ holidays entitlements.”
READ: Ryanair shares lower on continuing fallout from move to cancel a number of flights for six weeks
He added: “Thousands of customers will likely be affected, with a possible compensation bill totalling £20mln, not to mention huge reputational damage.”
Hiscott noted: “The share price had been flying, making a new all-time high in August at €19.78, but the latest saga has seen the stock pull back to below €17, trading as low as €16.40 when the issue first came to light.”
But, he added: “Today it has been recovering slightly, possibly on the hope that the damage has been contained. Certainly though, investors will be left questioning, how this happened in the first place.”
In early afternoon trading, following a near 6% slide over the past week, Ryanair shares – listed in both London and Dublin – were up 1.5%, or €0.25 at €16.98.
Credit Suisse cuts Ryanair target price, estimates
Analysts at Credit Suisse reduced their target price for the airline’s shares by 2% to 21.42 euro in a note today after cutting estimates due to the operational disruption and onward labour cost pressure, although they maintained an ‘outperform’ rating on the stock.
They lowered their current year net income forecast by €25mln to reflect potential lost contribution of €5mln and EU compensation charges of €20mln, and reduced their net income estimate for next year by 2% after raising staff cost estimates by 4%.