After the collapse of Monarch Airlines, the share prices of the low-cost airlines Ryanair and easyJet rose sharply.
Immediately after the European stock markets opened, easyJet shares increased around 4 per cent, which made it one of the biggest climbers on the FTSE 100 index. The airline gained throughout the day and finished the session over 5 per cent higher.
Dublin-listed shares in Ryanair, hit by a recent staffing debacle that has led to the cancellation of thousands of flights, ended the day up around 3.5 per cent.
Neil Wilson, senior market analyst at ETX Capital said that usually what’s bad for one airline – higher fuel costs, terror attacks, and air traffic control strikes – [is] bad for the sector. Shares in the various players have a tendency to track each other with some consistency.”
He continued saying that the failure of Monarch is good for the rivals. This is the third airline failure in Europe this year after Alitalia and Air Berlin and is a sign of over-capacity and overly-aggressive pricing.
All flights operated by Monarch from the UK and all future holidays booked with Monarch have been cancelled with immediate effect. The collapse took away jobs of around 2,750 staff. The government described the event as the country’s biggest ever peacetime repatriation of stranded travellers.
