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Holidays are still a top priority despite tight living costs, says Easyjet boss Johan Lundgren
Pressured consumers continue to travel abroad despite rising living costs, Easyjet boss says.
Travel has risen to the top spot in discretionary spending. People want to travel,” said Johan Lundgren.
His comments came after the budget airline saw a rise in passenger numbers in the last three months of 2022. Easyjet flew 17.5 million people in the quarter, up 47 percent from a year earlier.
Easyjet boss Johan Lundgren said he was ‘surprised’ at the strong demand against the gloomy backdrop as families face skyrocketing food, fuel and energy bills
And the airline said it will return to the black this year after three years of losses. In the 12 months to September, Lundgren said it will break analyst forecasts of a £126 million profit. Shares jumped 9.7 percent, or 45.4p, to 513.4p.
Stocks are up nearly 60 percent since the start of the year, amid mounting evidence that holidays remain a priority for cash-strapped households.
A report from KPMG found that while nearly two-thirds of people in the UK will cut their spending this year, holiday plans were the least likely to be interrupted.
AJ Bell investment director Russ Mold said: “Despite the prospect of a recession, many consumers still have the appetite and resources to spend money on experiences.
People work hard and want to spoil themselves, which keeps a foreign holiday high on the list that people are willing to pay for.”
Lundgren said he was “surprised” at the strong demand against the gloomy backdrop as households face skyrocketing food, fuel and utility bills.
Easyjet’s performance has continued this year, aided by three record-breaking weekends this month.
Customers benefited from the January sales, and the airline filled five planes every minute during peak hours.
Bookings for Easter are a quarter ahead of pre-Covid levels and there is strong demand for summer holidays despite Easter prices being nearly a quarter higher than the same time before Covid hit.
“People have had limitations and been home a lot and they want to get out and experience things,” Lundgren said.
The rising cost of living prompted a shift towards more affordable breaks. Trips to Turkey and Egypt are going ‘extraordinarily well’.
He said flight availability will be back to pre-Covid levels by the summer. “By July, August and September, we expect to be back at 2019 levels,” Lundgren said.