Last week’s market and bankruptcies review and future profitable industries

Despite last year’s generally appalling financial results for most airlines, it did seem that some were going to continue to operate, and that the financial aid distributed by various governments might spare some smaller airlines. But now, whatever the revenue of the airline and whichever market it is serving (apart from Asian airlines), the slow but painful demise is showing its true colors. This week’s absolute plunge on Easyjet’s stock cannot be forgotten, as from the 22nd to the 29th of June, the low-cost carrier’s share price went from 0.977p to 0.892, a loss in value of 0.085p. Its recovery is slow and painful, the Friday close settling at 0.923p. There was money to be made from anyone who kept a small long position around 0.932p, however, as we said on the 9th of June, a short downfall did occur the next day, then a comeback from which to take some profit, before a definitive collapse. The stock’s low point has reached under that of 0.892 in February 2021. Green list countries have gone down in number, the drop in fuel (or Brent Crude Oil) prices when comparing the 25th to the 28th of June (which is usually good news for airlines), didn’t even stop Easyjet’s devaluing, and the cessation of operations of 2 important European regional carriers only gave more destinations for British Airways to take over. The lesson to be learnt from this is that Brent recovered but airlines did NOT (Ryanair did, though). Although small profits can be taken occasionally, this is no longer a call for staying long, generally speaking.

The casualties are never the big boys, as one must learn (although they will get the cut soon, too). Every good idea that comes to be in this afallen industry has sunk to the brink, like Air Antwerp (a Belgian airline wholly owned by KLM that operated a route between Antwerp and London) did. Despite its successful start in May 2019, it has suffered since the beginning of the mysterious atom ball, and was forced to cease operations last month. Its sole aircraft, a Fokker F50 (powered by 2 Pratt & Whitney Canada PW125 turboprop engines), is now standing at Malmo Airport, in the same country where its lessor, Amapola Flyg, is based. Amapola Flyg was formerly a sub-lessor of Stockholm-based Largus Aviation, which has now ceased operations.

Another Irish laddy, Stobart Air, has waded its way into the cold bogs of Shannon, having started as Aer Arann in 1970, a commuter airline operating a Britten-Norman Islander for flights between Galway and the Aran Islands (both of which are situated in the south-western Irish province of Munster). After its 30% acquisition of Flybe (in the attempt to save the formerly independant airline from bankruptcy) in late 2018, Flybe still went bankrupt in early 2020, which minimised Stobart’s operations in the UK. And yes, the economic crisis has claimed it, although its Guernsey-based parent company Esken , which runs logistics operations and wood transport for biofuel and other low-carbon industries, is still doing fine. Stobart Air ceased operations with 12 ATR 72-600s and 1 ATR 42-600 in its fleet, all of which were operated for Aer Lingus subsidiary Aer Lingus Regional, which has now temporarily terminated operations due to the bankruptcy of its sole aircraft operator. The fate of Stobart Air’s fleet is unknown, but it is probable that it will be transferred to Aer Lingus to operate directly for Aer Lingus Regional. 2 former Stobart Air ATR 72-600s are currently standing at Billund in Denmark, which would lead to thinking that either Sonderborg-based Alsie Express could take them up, as it already operates 3 ATR 72-500s, or Aalborg-based Great Dane Airlines, which has previously been a customer of Stobart’s for Embraer ERJ-195s.

Finally, Thessaloniki (in the Eastern Greek region of Macedonia, which is at the border with the Republic of North Macedonia, separate from Greece) and Athens-based carrier Ellinair is in a ‘stand by mode for the resumption’ of flights (this is quote from the Ellinair website) after over seven years of managing charter and scheduled flights throughout Eastern and Southern Europe. It has therefore not ceased operations, but its parent company, Mouzenidis Travel Greece, which organises tours throughout Greece, has suspended operations. This has not effected Ellinair, and the Mouzenidis group, an internationally-focused Greek corporation owned by I.Mouzenidis, which is well-known in the industries of securities, travel organising, logistics and development, remains active.

To conclude, this is proof that the airline industry is currently in a worrying state. On the contrary, if certain airlines or businesses specialize in logistics, restrictions do not apply to them. It is time to start the move to Asian airline stocks, more viable in the long run due to more freedom of travel, and into cargo companies. In what concerns the normal individual, all sorts of delivery markets, whether local or regional, can be re-organised to serve people at home, as god knows when all of this is going to end. 6th of July 2021.

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