In a cabinet meeting held today, Ministers have at long last made a decision on the question of airport expansion, choosing the option expected by the markets being a third runway for Heathrow. Downing Street has not yet confirmed the decision, but this is expected later today at 1.00pm.
Whilst Easyjet hasn’t made any recent comments, in January 2015 the carrier said it backed Heathrow in London’s runway expansion race since 2015, and at that time said it would start flying from the capital’s largest airport if the government chooses to increase its capacity. This was widely reported at the time as it punched a hole in the argument put forward by Gatwick at the time, that it the best location for the next runway in the south-east of England as it caters for low-cost carriers which are priced out of Heathrow.
The short term repercussions of todays move will be one of sentiment only. It will not operationally affect airlines for a decade or more, as legal challenges are expected rom groups opposed to the decision.
My target price for Easyjet currently remains unchanged at £12.50, and the research not on Easyjet can be found here. https://riskybearinvesting.com/2016/09/27/easyjet-target-price-12-50/