EasyJet’s Share Price Climbs As FTSE 250 Airline Increases FY Earnings Guidance

Low-cost airline easyJet watched its share price rise on Tuesday as it hiked earnings guidance for the full year.

At 523.p per share easyJet shares were last trading 3% higher on the day.

The budget operator said that it expects pre-tax losses to range between £405 million and £425 million for the six months to March. This is down from the loss of £545 million it recorded a year earlier.

It said that solid first-half trading had been “driven by self-help measures including network optimisation, improved ancillary products, and a continued cost focus which allow us to fully benefit from strong levels of demand.”

Recent trading also led it to predict that full-year profits would beat market forecasts of £260 million.

easyJet commented that “whilst we remain mindful of the uncertain macroeconomic outlook across the globe, based on current high levels of demand and strong bookings, easyJet anticipates exceeding current market profit expectations.”

Turnover Jumps 80%

Revenues leapt 80% during the first half of its fiscal year, easyJet said, to £2.7 billion. This was driven by a 78% improvement in passenger revenues, to £1.8 billion. Meanwhile ancillary revenues increased by around two-thirds year on year to £765 million.

Demand was particularly high at the company’s easyJet Holidays package holidays division. Sales here ballooned 218% to £175 million.

easyJet continues to ramp up capacity and annual growth reached 40% during the second quarter. It said that capacity growth will continue into the summer, where it is expected to return to pre-pandemic levels.

Fuel costs per seat in the first half leapt 71% to £20.43 thanks to “significant fuel price increases year on year and the strengthened US dollar,” easyJet said.

The airline described Easter demand as “strong” and it operated approximately 1,600 flights a day over the holiday period. Capacity also reached pre-pandemic levels despite strikes by French air traffic controllers.

Strong trading at easyJet Holidays during the first half prompted the business to hike its full-year growth expectations here to around 60% from 50%. The package holidays division is now 80% sold for the summer.

“Continued Strong Booking Momentum”

Chief executive Johan Lundgren commented that “demand for easyJet’s flights and holidays has continued to grow in the half, resulting in more than a £120 million improvement in our performance as well as a billion-pound revenue improvement year on year. This is further enhanced by our transformed network of popular destinations and improved revenue capability.

“We see continued strong booking momentum into summer as customers prioritise spending on travel and choose airlines like easyJet offering the best value and destination mix, as well as easyJet holidays which is continuing its steep growth trajectory as the fastest growing holidays company in the UK,” he added.

“Sun Is Shining”

Analyst Susannah Streeter of Hargreaves Lansdown commented that the “sun is shining” on easyJet’s summer prospects, noting that “the company is facing little turbulence from cost-of-living headwinds with customers clearly prioritising travel and experiences over buying more stuff.”

She added that “although economy uncertainty could still cloud the horizon, its short haul network of routes should be a strength given that travellers may be more likely to opt for a quick trip to Europe than a more expensive transatlantic holiday.”