Thursday, January 24, 2013
LOW cost airline easyJet said today that it expects lower half-year losses after a strong start to the ski season and record numbers of business travellers.
The Luton-based carrier, which is also a major operator out of Stansted and Southend airports, last month achieved the milestone of flying 10 million business passengers over the past year and hopes this will increase further after completing the roll-out of seat allocation.
EasyJet posted a 9.2% rise in revenues to £833 million over the three months to the end of December after flying 13.7 million passengers, up 6.2% on a year earlier.
The group expects to deliver a strong improvement in first half figures, which traditionally show a seasonal loss for the airline, with easyJet forecasting pre-tax losses between £50 million and £75 million, from £112 million a year ago.
Shares opened 4% higher today and have already climbed 16% this year.
It is continuing to benefit as embattled competitors scale back their services, with capacity among rivals down by 2.1% or 800,000 seats on easyJet routes over the final three months of 2012.
The “exceptionally mild” weather seen in the quarter also helped limit disruption, with easyJet cancelling 64 flights during the three months against 236 a year earlier.
But it said the heavy snow and adverse weather over the past week had since caused a surge in cancellations, at around 200 between Friday and Sunday alone, with French airports the worst affected.
The no frills airline has already sold around 80% of seats on its planes for the first half, but said it was still too early to gauge its full-year performance with only 15% of seats sold for the second half.
It struck a cautious note over its full-year outlook, despite the robust start to its financial year.
The group said: “EasyJet has had a stronger than expected first quarter, however the consumer environment is expected to remain tough and the impact of government austerity measures means that the industrial relations climate across Europe is expected to be increasingly difficult.”
EasyJet’s figures come in stark contrast to the woes faced by Exeter-based regional airline Flybe, which yesterday announced around 300 job losses as it battles to cut costs by £35 million to stem losses.
EasyJet said the snow disruption over the weekend cost it around £1.5 million, but stressed most of the cancellations were not at UK airports.
The group - Europe’s fourth biggest short-haul carrier - has become increasingly popular with business passengers as under-pressure companies look to cut their travel expenses.
It said 17% of the 59 million passengers carried last year were business travellers.
The group has also recently struck a deal to offer public sector staff in Scotland low-cost, flexible fares on flights between London and Scotland.
Today’s figures also revealed a further pick up in growth of revenues per seat, up 8% to £55.96 with currency movements stripped out, helped by the success of its “Europe by easyJet” adverts - its first television ad campaign featuring images from award-winning photographer Elaine Constantine and music by indie band The Wombats.
The firm’s load factor - a measure of how well it is filling its planes - edged up to 88.6% from 87.6% a year earlier.
EasyJet continued to face higher costs, but said the rise was not as bad a feared due to more stable fuel prices and less flight disruption.
The group estimates its fuel bill for the year will be up to £25 million higher than in 2012.