Section 1.0. Aviation Sector Landscape, Trends & SWOT Analysis

The Aviation sector market segment comprises airlines players along with the air navigation, airports, and other ground service providers. The sector serves shippers, consumers, and passengers to provide reach, reliability, and speed through air transportation. As per the UK’s Department for Transport, the United Kingdom has the largest aviation network in Europe and the third largest in the world as it created more than 230,000 jobs and contributed nearly £22 billion to the UK economy, prior to the Covid-19 pandemic. As air transport plays a vital role in economic contribution, labor movement, and global supply chains, it can create long-term opportunities for investment. Moreover, the enormous progress on the Covid-19 vaccine front, passenger demand revival, and holiday travel plans holds potential for short-term gains as well.

On 31 October 2022, the UK Government introduced a new campaign, Generation Aviation, to support the aviation industry’s recovery from the pandemic induced slump. Following the pandemic, the industry is confronting challenges from changing travelling patterns to decarbonization. Therefore, engagement campaign and new recruitment can create a more sustainable, open and diverse aviation sector.

Section 1.1. Trends in the Aviation Sector

Section 1.2. SWOT Analysis

Section 2.0. Sector Risks & Opportunities

Section 2.1. Risk Exposures to Aviation Sector

Section 2.2. Aviation Sector Outlook

The aviation sector has gone through a massive disruption led by Covid-19 pandemic induced travel restriction. With effective vaccination program, the industry has witnessed a revival in passenger demand. However, with existence of several new concerning virus variants, the possibility of further disruption cannot be negated. In order to be resilient, the airline entities have started developing long-term budgeting, planning, and scheduling. Adjacently, the UK inflation rate has topped 40-year high, while oil prices are also surging amid geo-political tensions in Russia-Ukraine. Both these factors can limit the rate of growth. Therefore, cost pressure will remain a focus for airlines in this year. In addition, the coronavirus mayhem has brought cargo into the limelight, as Companies putting emphasis on rebuilding supply networks, scale, chain and leveraging advance analytics.

Section 3.0. easyJet PLC (Speculative Buy at GBX 354.00, closing market price of 01 November 2022)

3.1 Company Details

3.2. Key Metrics in Pictures

3.3 Valuation and Technical Guidance

Section 4.0: International Consolidated Airlines Group SA (Buy at GBX 123.44, closing price as on 01 November 2022)

4.1 Company Details

4.2. Key Metrics in Pictures

4.3 Valuation and Technical Guidance

Please note markets are trading in a highly volatile zone currently due to certain macro-economic and geopolitical tensions prevailing. Therefore, it is prudent to follow a cautious approach while investing.

Note 1: Past performance is not a reliable indicator of future performance.

Note 2: The reference date for all price data, currency, technical indicators, support, and resistance level is 1 November 2022. The reference data in this report has been partly sourced from REFINITIV.

Note 3: Investment decisions should be made depending on an individual's appetite for upside potential, risks, holding duration, and any previous holdings. An 'Exit' from the stock can be considered if the Target Price mentioned as per the Valuation and or the technical levels provided has been achieved and is subject to the factors discussed above.

Note 4: Target Price refers to a price level which the stock is expected to reach as per the relative valuation method and or technical analysis taking into consideration both short-term and long-term scenarios.

Note 5: ‘Kalkine reports are prepared based on the stock prices captured either from the London Stock Exchange (LSE) and or REFINITIV. Typically, both sources (LSE and or REFINITIV) may reflect stock prices with a delay which could be a lag of 15-20 minutes. There can be no assurance that future results or events will be consistent with the information provided in the report. The information is subject to change without any prior notice.’

Technical Indicators Defined: -

Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock.

Resistance: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Resistance 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Resistance 2 may act as the crucial resistance level for the stock.

Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices.

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