Airline profits hit new highs after August's holiday exodus

 

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The Independent Online

A late rush of holidaymakers in August helped send profits to record highs at EasyJet and Dart Group, the owner of Jet2.

Worries sparked by the murder of British tourists in Tunisia and the possibility of a Greek exit from the eurozone had clouded expectations earlier in the summer.

But the airlines said the easing of those fears and the strength of the pound had helped contribute to a bumper month for flights to the sun.

EasyJet carried 7.06 million passengers in August, a new record for the no-frills airline and the second successive month in which it has flown more than 7 million. As a result, it has raised its profit forecast for the year to September from a range of £620m to £660m to a new high of £675m to £700m.

“The single biggest driver of our increased profits has been UK passengers going overseas to beach destinations,” said an EasyJet spokesman. “People have been going to Europe and coming back and telling their friends how much further their money will go.”

EasyJet’s bumper profits have come as a falling oil price has fed into lower fares. However, the company operates a rolling two-year hedge on fuel, so it is yet to feel the full benefit of a sharply lower crude price.

Dart Group, which owns a package holiday business as well as Jet2, said it had also had a strong summer, with higher airline ticket yields and load factors than in 2014. A greater proportion of its flyers are also buying package holidays from the travel company.

Dart Group said it was ordering 27 new Boeing 737 aircraft to cater for the growth in its package holiday operation. The planes will be delivered between 2016 and 2018.

Meanwhile, British Airways-owner IAG also reported a 12 per cent rise in passengers across its airlines, BA, Iberia and Vueling, to 9.1 million in August. Its shares rose 4 per cent to 564.5p, while shares in EasyJet rose  5 per cent to 1,762p.

Elsewhere in the travel sector, Eurotunnel surprised the market by reporting a record August on its Le Shuttle trains. Some 657,845 vehicles travelled through the tunnel using the service in July and August, with more than 1,000 vehicles an hour going through at peak times.

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