Sun-seekers to deliver boost to easyJet profits

An easyJet plane at Stansted Airport.

An easyJet plane at Stansted Airport. - Credit: PA

Budget airline easyJet today raised its annual profits outlook after being buoyed by sun-seekers jetting off on beach holidays.

The Luton-based carrier, also a major operator out of Stansted, said it flew 19.1million passengers in the three months to the end of June, up 6.2%, driven by UK holidaymakers flying to popular beach routes such as Alicante, Malaga and Faro.

Chief executive Carolyn McCall said with over 77% of its seats now booked for the second half of the year, it expects to hit full-year pre-tax profits of between £620m and £660m, compared with £581m a year ago.

The City had previously forecast a pre-tax profit of £638m this year.

Shares took off, rising by more than 4% on the FTSE 100 Index after the profits cheer and as third quarter sales were better-than-expected.

The airline’s load factor, a key industry measure of how full its planes are, rose 1.3% to 91.7%.

The carrier’s strong performance came despite having to cancel 1,463 flights during the period, compared with 648 a year earlier, because of French air traffic control strikes at Easter and a fire at Rome’s main airport, Flumicino.

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This saw sales fall 1% to £1.2 billion during the third quarter, and pushed its revenue per seat down 5.4% to £59.08 per seat, although the drop was better-than-feared.

Ms McCall said: “Our third quarter performance shows that easyJet’s strategy continues to deliver, in particular with good performance in the UK and beach routes across Europe.”

The airline said the tragic Tunisian beach shootings by terrorists last month, which killed 38, including 30 Britons, had a minor effect on the firm’s bottom line.

It had only begun twice-a-week flights to the country in June, and has since suspended them after Government advice. It said it will keep the Tunisian service under review.

The airline said it delivered £7 million of savings in the quarter, making £28m in the year so far. It added it was on track to make savings at the top end of the £30m to £40m range it has previously given.

Brokers at Cantor Fitzgerald said the better-than-expected performance was “driven by good trading in the UK and beach routes across Europe in May and June, and successful implementation of various revenue management initiatives”.