Easyjet is set to hit profit heights after summer boost
FTSE 100 budget airline easyJet today said it will hit the very top of its annual profit forecast thanks to a busy summer.
It comes just a month after arch-rival Ryanair claimed the August heatwave had caused it turbulence, forcing it to issue a profits warning.
Yet easyJet said it earned an extra 6% in revenues per seat during the six months to October, driven by strong demand in July and August.
The growth in passengers’ fares and spending on extras came despite the impact of political unrest in Egypt and the fact that, in the same period of 2012, the budget carrier pocketed an extra £25 million as Easter fell in the second half of the year. As a result, chief executive Carolyn McCall said she expects pre-tax profit for the year to October to come between £470 million and £480 million, the top end of previous guidance of £450 million to £480 million.
It’s a stark contrast with the picture at Ryanair, whose shock profits warning last month sent shares crashing 14%. The Irish airline blamed the heatwave, saying it meant would-be passengers stayed put, but easyJet’s success suggests fliers may have been rejecting Ryanair’s reputation for minimal customer service and extra fees.
Ryanair’s chief executive Michael O’Leary also warned of slow autumn demand, forcing the carrier to cut capacity over winter and ground as many as 80 aircraft. By contrast, easyJet today said it saw a 4.8% rise in passenger numbers during September, with the most popular destinations being Palma, Alicante, Faro and Malaga alongside City break destinations Barcelona and Amsterdam.
EasyJet also said it has already sold over a quarter of seats in the first half of the 2014 financial year.
The City was impressed. “Brisk trading in the third quarter continued into the fourth,” said Mark Irvine-Fortescue, analyst at Jefferies.
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