Easyjet and Carnival poised to drop out of FTSE 100
Easyjet and cruise operator Carnival are set to lose their positions in the FTSE 100 after the coronavirus crisis sent the value of their shares crashing.
The travel restrictions have hit the budget airline hard as it lost as much of two thirds of its market value during the peak of the crisis.
There will be the quarterly shuffle of the FTSE 100 index on Wednesday, which requires firms to be ranked at least 110th to be part of the index. Easyjet was ranked 125th based on Monday’s stock market close.
Easyjet plans to axe 30 per cent of its staff and reduce its fleet in preparation for an anticipated slowdown in travel in the aftermath of the pandemic. The airline said it does not expect demand to return to 2019 levels for three years in line with projections from the International Air Transport Association (IATA).
Easyjet only returned to the index last December after another fall in its shares. Russ Mould, investment director at AJ Bell, predicted Easyjet could return at the next shuffle in September but it would “need a big rally”.
Despite the stock market rallying since late March, after it faced one of the most turbulent periods in its history, many stocks have struggled to recover. Carnival’s shares are down 70 per cent so far this year after suspending operations when the pandemic hit.
The struggles faced by travel stocks have been ongoing for some months, exposed in the last shuffle in March which saw holiday operator Tui drop out of the FTSE 100.
Among other companies expected to be dropped from the index are energy supplier Centrica and engineering company Meggitt. Software security firm Avast and Ladbrokes owner GVC are tipped to enter the FTSE 100 after faring relatively well during the Covid crisis.