EasyJet surges on traffic recovery

Shares in easyJet shot up 23 per cent yesterday after the no-frills airline reported a 20 per cent rise in passenger numbers in May and pointed to a recovery in demand. Ray Webster, easyJet's chief executive, said: "The market softness that we witnessed earlier in the year due to the effects of the Gulf conflict is now dissipating and we have seen a strong recovery."

The airline, which bought rival business Go, carried 1.76 million passengers in May - up from the 1.46 million the pair carried on a pro forma basis in the same month a year before. The stock closed up 38p at 201p.

EasyJet's May figures were seized on by Ryanair, which carried 1.828 million passengers in the same month, as proof that the Irish carrier was once again Europe's biggest no-frills airline.

EasyJet also reported an improvement in its load factor - or the proportion of seats filled - to 83.5 per cent, up from 81.6 per cent a year before.

The recovery in easyJet's share price follows a slump earlier this week after Ryanair warned profit margins would fall as it stepped up a price war with rivals. In an attempt to win more customers, it announced plans to cut its average fares by about 10 per cent, meaning average ticket prices will fall to around €40-€42.

EasyJet was yesterday playing down the move, saying it would not necessarily hurt it as it competed more with the larger carriers such as British Airways.

EasyJet also said yesterday that revenue per flight during May tracked at close to the same level as last year. Ryanair reported a 15 per cent fall for the same month.

In the 12 months to 31 May, EasyJet carried 18.1 million passengers with a load factor of 83.8 per cent.