EasyJet predicts record summer as peak season profits rise
- EasyJet sold 1.5 million more seats in peak season than in the same period last year
- In the three months to June, the company said it carried 25.3 million passengers
EasyJet is expecting a record summer this year after the airline posted higher profits thanks to soaring demand.
The budget airline, Europe’s largest after Ryanair, announced on Wednesday that it had sold 1.5 million more peak-season seats in the three months to June than in the same period last year.
The company reported that it carried 25.3 million passengers in the period, up 8 percent from the previous year, partly due to a strong performance in its package travel business.
Forecast: Low-cost airline EasyJet expects record summer
Combined with rising ancillary sales, this helped EasyJet’s total revenue rise 11 per cent to £2.6 billion in the third quarter, with net pre-tax profit up £33 million to £236 million.
EasyJet now predicts its package travel division will make pre-tax profits of more than £180m this financial year.
Johan Lundgren, the outgoing CEO of EasyJet, noted that the result was achieved despite the Easter weekend falling earlier than normal this year.
He said this shows “how important travel remains and that we are on track to deliver another record summer”.
Lundgren plans to step down in early 2024 after a turbulent seven-year term indelibly marked by the Covid-19 pandemic.
Severe restrictions on cross-border travel earlier this decade inflicted significant financial damage on the global aviation industry, resulting in massive job losses and bankruptcies of some airlines.
EasyJet reported annual pre-tax losses of £1.3 billion and £1 billion in 2020 and 2021 respectively, as demand for overseas holidays fell.
Trade has since recovered strongly, despite problems with strikes, staff shortages and the war between Israel and Hamas, which have deterred people from flying to the Middle East.
The company’s latest trading update comes days after Ryanair announced a sharp drop in profits and warned that fares would be “significantly lower” this summer.
Ryanair reported profits fell 46 percent to €360 million (£303 million) in the April-June period, due to an average 15 percent cut in fares for customers.
The announcement had a major impact on airline stocks, which were already reeling from Friday’s global IT outage.
EasyJet shares were the best performing FTSE 100 stock on Wednesday morning, rising 6.1 percent to 453.9p.
John Moore, senior investment manager at RBC Brewin Dolphin, said: ‘EasyJet’s performance should be an indication that conditions are not necessarily bad for the sector as a whole.
‘Concerns about the sustainability of the post-Covid travel boom are likely to linger for some time for airlines… But today’s results show that EasyJet is in a better position than many of its peers and is likely to weather this turbulent period.’
DIY INVESTMENT PLATFORMS
AJ-Bel
AJ-Bel
Easy investing and ready-made portfolios
Hargreaves Lansdown
Hargreaves Lansdown
Free Fund Trading and Investment Ideas
interactive investor
interactive investor
Fixed investment costs from £4.99 per month
Saxo
Saxo
Get £200 back on trading fees
Trading 212
Trading 212
Free trading and no account fees
Affiliate links: If you purchase a product, This is Money may earn a commission. These deals are chosen by our editorial team because we think they are worth highlighting. This does not affect our editorial independence.