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Cut-price

9 May 2007 By Fiona Maharg-Bravo

Fares are dropping across the board, and so are shares in airline stocks. The simple answer is that there is too much capacity. But that doesn t mean that airlines like Easyjet will stop growing. Its share price drop looks overdone. Investors are worried about overcapacity driving down fares. Easyjet’s shares have fallen nearly 10%. This seems unfair. Overcapacity is more of a problem for network carriers. Easyjet actually looks wellplaced to grow through any turbulence.

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