EasyJet profits expected to fly past £260m as demand and ticket prices soar
Easyjet announced a £120m improvement in its first half performance year on year, as the low-cost airline continued to turnaround its business.
Headline losses before tax for the first half are expected to be between £405m and £425m, in spite of economic challenges including inflation, rising fuel costs and preparation costs for summer.
The airline reported a particularly strong Easter, with 1,600 flights operating per day and capacity around pre-pandemic levels. 99.8 per cent of planned flights jetted off despite disruption from French strikes over pension reforms.
It has continued increased its capacity throughout the quarter, growing 40 per cent from January to March and is expecting to hit pre-pandemic capacity by summer.
Johan Lundgren, chief executive of Easyjet, said: “demand for easyJet’s flights and holidays has continued to grow in the half, resulting in more than a £120 million pound improvement in our performance as well as a billion pound revenue improvement year on year.”
He highlighted the “strong booking momentum into summer as customers prioritise spending on travel ,” as well easyJet holidays “steep growth trajectory.”
“All of this means Easyjet expects to outperform FY23 market expectations.”
EasyJet turning a corner?
John Moore, senior investment manager at RBC Brewin Dolphin, said that “there are real signs the airline is beginning to turn a corner.”
He explained that “taking more of a ‘Ryanair approach’ to routes, baggage allowances, and staff shifts has helped to protect yields and margins, and the airline is well hedged in terms of fuel costs. “
“Airlines’ shares have stalled in recent months, but easyJet should be on track to build up around 40p of earnings per share over the next 12 months or so, which would make the company’s shares appear on the cheap side relative to the rest of the market.”
Emma Carr, retail partner at Gowling WLG, predicted that “shareholders will take confidence from these results. It looks like the new cost control measures, new route additions and a strong balance book has helped to keep the company steady as we predicted back in January.”
Easyjet’s shares (EZJ) were last up just over three per cent at 526.96p.