Load factor, fares and shares slip at easyJet

The low-cost airline easyJet said yesterday its average ticket price and the proportion of seats filled had dropped in the past three months. It also said it may consider stalling capacity growth to boost profits.

While passenger numbers were up 20 per cent to 6.3 million in the three months to the end of June, the average fare fell 6.7 per cent to £42.97 as competition and the addition of new routes hit prices. The proportion of available seats that were sold fell 1.9 percentage points to 82.9 per cent.

"Yields remain under pressure," Ray Webster, the chief executive of easyJet, said. The news follows a warning from the airline in June when it said its 2004 profit might suffer from soaring fuel prices and competition from new airlines. Existing airlines are also involved in a price war.

Shares fell as much as 4.2 per cent at one point yesterday, hitting an all-time low, before closing at 137p, down 5p on the day. The shares have dropped by about 53 per cent this year.

Despite his belief that fares will continue falling, particularly over the winter period, Mr Webster said he was confident that the company would post a full-year pre-tax profit of more than £52m. In July, passenger numbers were up 28 per cent to 2.4 million, and the load factor increased to 88 per cent from 85 per cent in July 2003. This took group revenues up 17 per cent over the 12 months to the end of July.

Six new destinations, including the Slovakian capital Bratislava, have been added to easyJet's route map this week, bringing the airline's total number of routes to 179. It has also ordered 120 Airbus planes to be delivered by 2007. But Mr Webster also said the airline was continuing to review its growth and deployment of its capacity, and would make a statement on its strategy by the end of the year.

As oil prices continued to soar this week, topping more than $44 a barrel, easyJet said it had 50 per cent of its fuel costs hedged at about $37.75 a barrel for the rest of its financial year.

In a separate statement, Stelios Haji-Ioannou, the founder of easyJet, said yesterday he was on the verge of signing an agreement with a European phone company to start a UK mobile phone. EasyMobile.com will be introduced in 11 other countries across Europe.