Business flyers help easyJet cut first-half losses
Cost-cutting firms who still have to send executives on planes to do business are making them fly easyJet –and that's helped the budget airline slash its expected first-half loss.
Airlines are almost always loss-making in the first half of the year, but easyJet has told City analysts to expect its pre-tax, half-year loss to be between £50m and £75m this year – considerably lower than the £112m six-month loss it posted for the first half of 2011.
The news sent shares in easyjet flying up 5 per cent to their highest level since the airline floated over a decade ago.
It came, the orange airline said, off the back of higher revenues thanks to a surge in business travellers.
Five years ago, easyJet flew about 7.5 million fliers who were travelling for business; last year, that number approached 10 million as recession-struck firms, including all the high-street banks and the Government, forced their staff to fly on a budget carrier. The Houses of Parliament signed a travel deal with easyJet in September.
"Companies are becoming a lot more cost-conscious – all the high-street banks are now flying business on easyJet," said chief executive Carolyn McCall.
Revenues for the last three months of 2012 rose 9.2 per cent to £833m. Passenger numbers were up by 6.2 per cent over the same quarter, at 13.7 million.
Easyjet added it was considering ordering three A320 planes under its existing agreement with Airbus, but that a decision on whether to place a large aircraft order was still "months away."
Easyjet's founder, Sir Stelios Haji-Ioannou, and his family this week threatened to sell their 37 per cent stake in the airline "if they place such [a large jet] order".
Ms McCall said: "EasyJet has made a strong start to the year due to a combination of management action, competitor capacity reductions and the benign operating environment."
Shares rose 43.5 to 898.5p.
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