easyJet Shares Rocket 15% as Budget Airline Smashes Profit Targets Amid UK Travel Rebound

EasyJet, the low-cost carrier based at Luton, provided a blockbuster trading update today, which saw its shares soar 15% in a volatile London trade. The increase of the largest one-day rise in more than three years comes after the airline reported record half-year profits driven by a travel boom in the post-pandemic period, and well-timed hedging against fuel prices added PS800 million to its market value.

The FTSE 100 member posted adjusted pre-tax earnings of PS450 million in the half-year up to September 2025, crushing forecasts by 20% and 50% higher than in the year-on-year.

The major factors were an increase of 12% in the number of passengers to 50 million due to high demand for the European leisure routes, and ancillary passenger seats and baggage growth of 15%. The management attributed their ability to deal with the summer calamities caused by air traffic strikes to agile capacity management and dynamic pricing.

This outstanding performance is a stark contrast to the plight of the rivals; parent company IAG of British Airways issued a warning over cost pressures last month, and easyJet shares, which started at 520 pence, soared to 598 pence, which is 0.5% above the FTSE 100. Ratings were also upgraded, and one company raised its target to 700 pence, citing it as structural tailwinds due to the hybrid work that allows more short-haul journeys.

The turnaround story of easyJet is the cause of investor euphoria. The carrier has been beaten up by Covid lockdowns, has divested non-core assets, refinanced debt, and increased hubs in major hubs such as Gatwick and Manchester. A new fuel-saving fleet of A321neos will cut emissions by 20% by 2030, which is in line with the EU requirements of sustainability, and it will attract ESG funds.

FTSE Travel Sector Takes Off as easyJet Leads in the Aftermath of Post-Budget Optimism Wave

Ryanair and Wizz Air gained by 7-10% and the FTSE 350 travel and leisure index rose by 4% as the uplift spread through the aviation sector. London benchmark rose, with the help of consumer cyclicals, as the declining inflation statistics indicated CPI at 2.1.

The UK tourism resurgence extends to wider UK levels: inbound tourists shatter pre-2019 records, according to VisitBritain, due to a weaker pound and visa waivers. The freeze of the aviation duty and regional connectivity grants in the Budget of Chancellor Reeves is buzzing with airlines about the growth opportunities. However, one of the headwinds is still there; jet fuel prices are increasing by 10% due to OPEC reductions and labour unrest at ground handlers that jeopardise winter schedules.

In the case of easyJet, this milestone confirms the no-frills model of the company that was started in 1995 by Stelios Haji-Ioannou. In an optimistic call, the board announced a dividend resumption of 20 pence a share – the first time since 2019 – and allocated PS300 million to share buybacks. The CEO boasted of 100 million passengers a year in 2027, saying we are in a position to achieve sustained profitability.

The effects were a trading frenzy: volumes were up fivefold, retail punters and institutions were buying stock. The forward P/E of 12 times underestimates the peers, according to consensus, particularly when the net debt will decrease to PS500 million.

Aviation Horizon: Are Green Fuels and AI Propelling easyJet into the New Heights?

When glancing at the sky, the plan of EasyJet is based on innovation. In tie-ups with BP and Neste, pilots of sustainable aviation fuel (SAF) blends seek to go 10% by 2030 to avoid carbon taxation. AI-based route optimisation has already reduced the costs by 5%, and the improvement of the app increases direct bookings to 80% of the revenues.

Sceptics note weaknesses: a possible recession would likely trim leisure spending, and the threat of the high-speed rail taking over domestic routes stares back. The continued passport snarls on the EU borders caused by Brexit create tension, as calls to make things digital mount.

With the current bonanza, shareholders are enjoying blue skies. Festive bookings are remarkably strong with winter sun seekers thronging the Canary Islands and Egypt. With oil stabilisation and borders relaxing, easyJet might surpass its 2019 heights.

Overall, the rise of easyJet reflects the strength of UK plc, which turned the winds of travel against it to its advantage. Back of the globe, and in comes this orange-livered disturber, and rewards the adventurous ones in the turbulent revival of air travel.