EasyJet raises profits guidance
Friday 22 July 2011
Budget airline easyJet today said its profits were set to beat expectations after its new strategy, which includes appealing to more business passengers, started to bear fruit.
The airline said it has now sold 75% of its seats for the key summer season and expects full-year pre-tax profits of between £200 million and £230 million. Analysts had been expecting an average of £179 million.
Revenues in the three months to the end of June increased 23% to £935 million after it increased its number of flights and ancillary revenues, which include charges to check-in bags, rose 17% per seat to £11.65.
The airline said the number of passengers flying on business increased 20% in the quarter.
It follows the launch of its new flexible fare targeted at business travellers that gives passengers the option of changing their flight up to two hours before the scheduled departure time as it looks to diversify its offer away from the budget end of the tourist market.
The airline's strategy to target business passengers announced in November included flying to more city routes. The move will help increase demand for flights throughout the year, making easyJet less reliant on seasonal tourism.
EasyJet said the number of passengers increased 17.3%, partly because the same period in the previous year suffered disruption as a result of the Icelandic ash cloud, which caused flights to be cancelled.
But it said passenger numbers were still up 8.8% once the effect of the eruption was stripped out.
Total revenues per seat increased 5.2% to £56.02. Within this, ticket prices were up 2.5% to £44.37 with rise mainly being driven by the increase in ancillary revenues.
EasyJet last year announced it would pay its maiden dividend in January 2012 after full-year profits nearly trebled to £154 million. It today said there was a possibility that the payment could be increased above the 20% initially proposed, depending on the full-year performance.
An increased dividend would please founder Sir Stelios Haji-Ioannou, whose family controls around 38% of the shares, and has long called for the company to deliver a return to shareholders.
Shares opened 14% higher today.
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