EasyJet halves its losses as Britons flee the big freeze
Britons escaping our cold weather to seek last-minute sunshine abroad helped easyJet almost halve its first-half losses in its first update as a FTSE 100 company today.
The UK and Europe’s particularly cold winter and sub-zero temperatures at the start of spring wasn’t all good news for the budget carrier: snow meant it cancelled more flights than usual, holding capacity growth to3.3% rather than the expected 3.5% for the six months to April.
But easyJet also cashed in on the big freeze, as a rash of late bookings for Easter to winter sunspots including Egypt’s Sharm el Sheikh and Madeira in Portugal raised sales. The airline’s prices are also higher when passengers book closer to take-off time. “Poor weather across the UK and northern Europe stimulated strong bookings in the last few weeks of the first half of the financial year,” chief executive Carolyn McCall said.
EasyJet’s pre-tax loss for the six months to April will be between £60 million and £65 million, sharply down from its £112 million dive into the red this time last year.
The early Easter also boosted the carrier’s results, and it said that good snow across Europe’s ski resorts for the last two months had also meant stronger than usual sales on its Geneva route, a gateway to the French Alps.
The current cold snap has even seen more passengers than usual booking flights for sunny destinations for October and November this year, an airline spokesman said, plus “very healthy bookings” for the February school half-term in 2014.
But easyJet shares faced a descent from their recent record highs — they were hovering at just under £4 when McCall took over in July 2010 before exceeding £11 this year — falling 3.9% or 42p to 1055p today.
“Technical signals are beginning to suggest traders losing interest, questioning whether this flight has gone too far and the shares are running out of fuel,” Mike van Dulken at Accendo said. But McCall focused on the airline’s performance and “our disciplined approach to capacity deployment and a focus on cost management.”
The chief executive also today exercised existing options to place an order for three new Airbus A320 jets, whilst the airline is still mulling a another large plane order which easyJet founder Sir Stelios Haji-Ioannou has vehemently opposed.
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