Here's why EasyJet share price has crashed and what next

EasyJet's share price plunged to 480p, its lowest since April 24, following the release of weaker-than-expected third-quarter earnings, which the budget airline attributed primarily to £15 million in French air traffic control strikes and £10 million in elevated fuel costs. While headline profit before tax did rise to £286 million, the company cautioned about slower capacity growth in the year's second half. Despite these operational headwinds, EasyJet ended the quarter with a robust balance sheet, holding £803 million in net cash, which could provide a fundamental floor for recovery.

Analysis

EasyJet's share price experienced a significant decline, falling 18% from its yearly high to 480p, directly following the release of weaker-than-expected third-quarter results. Management attributed the performance shortfall to specific external headwinds, quantifying a £15 million impact from French air traffic control strikes and a £10 million hit from elevated fuel costs. Despite these challenges, headline profit before tax grew by £50 million year-over-year to £286 million, supported by a rise in passenger numbers to 25.9 million. However, the company issued a cautious outlook, signaling slower capacity growth for the second half of the year, which contrasts with more aggressive expansion at peers like Delta and United. Fundamentally, EasyJet maintains a strong position, highlighted by a net cash balance of £803 million and an undrawn £1.7 billion credit facility. The technical picture is mixed; while the stock trades below its 50-day and 200-day moving averages and has formed a bearish double-top pattern, there are early signs of a potential bullish inverse head-and-shoulders formation, with critical support at 467p.

Key Decisions for Investors

• Investors should monitor European air traffic control stability and jet fuel price movements, as these external factors have a direct, quantified impact on EasyJet's profitability.
• Consider the company's robust balance sheet, with £803 million in net cash, as a significant buffer against the operational headwinds and cautious capacity guidance.
• For technically-oriented investors, the 467p level is a critical support to watch; a sustained hold above this price could support the bullish reversal thesis, whereas a break below would signal further downside risk towards the 401p neckline.