Easyjet says strong demand for flights and holidays has helped it slash its first half seasonal pre-tax losses by up to £71million, putting it on track for a record summer.
Chief executive Johan Lundgren said that it expects its losses for the six months to the end of March to be between £340-360million. For the same period last year, EasyJet lost £411million.
Strong demand for flights, particularly at Easter, as well as profits trebling and customer numbers soaring 42 percent at its holidays division and productivity gains, helped the airline offset rising fuel costs and disruption caused by the conflict in the Middle East.
Fuel headwinds added six percent to the cost of a seat, while the situation in Israel has cost the airline £40million so far. EasyJet has suspended flights to Israel for the summer and is diverting capacity to other locations where there is strong demand.
Despite the challenges facing it, Lundgren was in confident mood: “We move into the summer period with confidence we can deliver another record summer performance.”
He pointed out that EasyJet’s summer bookings are “building well”, with both sales volumes and prices higher than they were last year. Its holidays division is 70 percent sold for the summer and it believes the division will have at least 35 percent customer growth for the whole year.
“We are well set up operationally for this summer season where we expect easyJet to be one of the fastest growing major airlines in Europe and take more customers on easyJet holidays than ever before,” Lundgren said.
EasyJet expects its revenues per seat to be up in the third quarter and “well ahead” in the fourth.
Richard Hunter, Head of Markets at broker Interactive Investor, said that while EasyJet is making clear progress, the conflict in the Middle East and the uncertain economic environment could see the airline’s fortunes dive again.
“External factors outside of the industry’s control, have ranged over the years from pandemics to conflicts to volcanic ash clouds, let alone the possibility of strike actions affecting operating conditions,” he said. Aside from the conflict in the Middle East, there remains the possibility that the consumer will again batten down the hatches on discretionary spend.”
