EasyJet share price on track for biggest rise in two years as summer success lifts full-year expectations
A record number of passengers and cheap fuel prices have offset difficulties faced by the low-cost airline earlier in the year.
The figures
Budget airline EasyJet has said it carried a total of 7.1m passengers in August – a one-month record for the company. Similarly, the proportion of seats occupied on flights reached an all-time high of 94.4 per cent.
As a result, the company has raised its pre-tax profit expectation for the year to the end of September by seven per cent, from £620m-£660m to £676m-£700m.
This sent shares soaring by as much as 6.6 per cent when markets opened, setting the way for the airline's best day since September 2013. The upward streak has eased off to some extent, with shares currently up 5.6 per cent compared to yesterday.
EasyJet is now up 6.5 per cent for the year, compared to a 6.1 per cent decline in the FTSE 100 overall during the same period.
Why it's interesting
EasyJet said its August success was largely thanks to “particular strength” on routes from the UK to "beach resorts".
It marks a swift turnaround from May, when the company issued a profit warning after air traffic control strikes in France led to a series of cancellations in April.
This, combined with the impact of two fires at Rome's Fiumicino airport, led the company to wipe £25m off its full-year guidance for pre-tax profit. Shares dropped by around eight per cent at the time.
What EasyJet said
Chief executive Carolyn McCall said:
These figures demonstrate the strength of EasyJet – with its strong customer focus and its unique and winning combination of the best route network connecting Europe's primary airports, with great value fares, friendly service and industry-leading digital innovations.This platform meant that EasyJet was best placed to maximise the strong late summer demand from UK passengers to get away to beach and city destinations across Europe and will enable the airline to set new records for full-year revenue and profit.
In short
A series of problems in the spring worsened EasyJet's outlook for the year, but the popularity of the budget airline among passengers has helped to push up expectations.