Airline shares were flying higher on Tuesday as investors and analysts climbed back on board the sector after updates from EasyJet (LON:EZJ), Ryanair (LON:RYA) and Wizz Air (LON:WIZZ). 

Easyjet shares rose 9%, having scraped a three-month low at the start of the week after the UK last week tightened coronavirus restrictions on flights from some countries. 

Fellow FTSE 250 airline Wizz was up around 4% and Ryanair shares were up 2%, while FTSE 100 sector peer IAG (LON:IAG) jumped 6%.

EasyJet led the way as it upped capacity guidance for the fourth quarter to 40% from from 30% and provided better news on cash burn and the proceeds from its aircraft sale and leaseback programme.

“We are seeing a clear sign that many people are confident enough to travel despite the Covid risks that have held some back,” said Joshua Mahony at IG. 

“With the airlines likely to see better-than-expected revenues after improved demand, the subsequent alleviation of pressure on their finances should lessen the need for further funding going forward.”

Sun-seekers have provided an unexpected boost to easyJet’s performance, observed analyst Sophie Lund-Yates at Hargreaves Lansdown, with destinations like Nice and Faro proving popular as Brits seek getaways after many months of lockdown and travel bans. 

“While this is better than hoped for, and the progress shouldn’t be knocked, traveller numbers are still markedly below normal levels,” she noted. 

Analysts at Liberum said the third-quarter numbers were “meaningless” as easyJet having operated no flights for all but two weeks of the period, and only operating 10 lines of flying in the final fortnight and revenue of just £7mln comparing to £1,761mln the same period last year.

With demand not expected to return to pre-pandemic trends for quite some time, easyJet and its peers continue to call on the government to do more to help the aviation industry. 

“We urgently need to target quarantine requirements to where spikes have occurred rather than at national level,” chief executive Johan Lundgren told reporters on a call.

He said the renewed quarantine for flights from Spain was deterring new bookings though had not caused customers to cancel travel plans.

Lundgren criticised the UK’s approach towards so-called travel corridors, arguing the policy was “not specific enough” and pointing out that parts of Spain had far lower rates of infection than some areas of the UK.

However, it is far from plain sailing for the airlines, meaning EasyJet is doing its best to keep cash in the business, with a major restructruring programme announced in May, including cutting up to 30% of jobs, optimising the network and leases. 

“With its end-market having shrunk so much, the size of the workforce must fall in line,” said Lund-Yates.

“Overall there are some signs of positivity at easyJet, but it would be a mistake to assume the challenges are over. 

“The group’s doing a lot of the right things to protect the long-term interests of the business, but the easyJet we’ll be looking at once its self-help measures are complete is going to be a very different beast.”

In July, EasyJet flew just over 2mln passengers on 147 lines in July, around 30% of capacity, with a load factor of 84%.

Ryanair and Wizz air both updated on July traffic figures, with Wizz Air carrying 1.8mln passengers, flying at 74% capacity and planes 61% full, compared to 25% and 52% in June.

Ryanair said it operated 40% of its normal schedule, carrying 4.4mln passengers with planes 72% full.

“The recovery is encouraging,” said analysts at Peel Hunt, “and will hopefully continue through August despite the UK putting Spain back on the quarantine list for those returning to the UK.”