easyJet posts significant reduction in winter losses

18th Apr 2024 08:20

(Sharecast News) - Low-cost airline easyJet reported a significant reduction in its winter losses in an update on Thursday, of more than £50m year-on-year, as demand for flights and holidays continued to rise, particularly for the upcoming summer season.

The FTSE 100 carrier said it saw a particularly strong revenue performance in its second quarter, with an 8% year-on-year increase in both passengers and revenue per seat (RPS), surpassing mid-single digit guidance.

Despite a slight decrease in load factor by one percentage point, ticket yield and ancillary yield saw notable growth of 9% and 10% respectively.

The company said its reduction in winter losses for the year was down to targeted capacity growth in high-demand areas, alongside productivity and utilisation benefits which kept ex-fuel unit costs flat compared to the prior year.

That improvement was achieved despite challenges such as fuel cost inflation and the conflict in the Middle East, which directly impacted the first half by about £40m.

The suspension of flights to Israel for the summer, comprising around 0.3% of planned summer flying, due to the conflict in the region, led to the redeployment of capacity across the network.

However, easyJet said it was still seeing growth in its holiday sector, with a profit before tax of £31m, marking a 206% increase compared to the first six months of the 2023 financial year, and a 42% increase in customer growth year-on-year.

Easter demand notably boosted March's performance, with operational efficiency improving year-on-year.

On-time performance (OTP) over Easter saw an improvement due to easyJet's targeted resilience actions.

Looking ahead, bookings for the 2024 summer were showing positive trends, with increased volume and pricing compared to the same period last year, driven by strong demand for easyJet's primary airport network.

As of now, 60% of the third quarter programme and 30% of the fourth quarter programme had been sold, reflecting year-on-year increases of one and two percentage points respectively.

Additionally, easyJet holidays had already sold 70% of its plan for this summer.

With a positive outlook for the full financial year, easyJet said it expected a slight year-on-year increase in third-quarter airline RPS, with continued growth in customer numbers for easyJet holidays of over 35% on the year.

"The importance that consumers place on travel coupled with easyJet's trusted brand has driven good demand for our flights and holidays," said chief executive officer Johan Lundgren.

"Our growth and focus on productivity have reduced winter losses by more than £50m."

Lundgren said the airline had further enhanced its network with the launch of new bases in Alicante and Birmingham, providing greater choice for consumers across Europe.

"We are well set up operationally for this summer season where we expect easyJet to be one of the fastest growing major airlines in Europe and take more customers on easyJet holidays than ever before."

At 0800 BST, shares in easyJet were up 5.29% at 545.6p.

Reporting by Josh White for Sharecast.com.