EASYJET offered hope for the beleaguered airline trade and for the wider consumer economy today when it said summer bookings are soaring even as ticket prices rise.
At the height of Covid easyJet racked up losses of more than £2 billion amid wider fears for the future of air travel. Some said the days of cheap air flights for the masses were over.
Today the budget carrier said profits for the year will beat City expectations with profits at £260 million. That compares to a loss of £178 million last time.
Demand was strong over Easter with 1600 flights a day taking off. Passenger levels are back to pre Covid levels, despite French air traffic control strikes and a squeeze on consumer spending due to the widely reported cost of living crisis.
Easyjet’s summer holidays are 80% sold already suggesting its pricing point is an advantage in tough economic times. Passenger numbers reached 15.6 million during the first three months of the year, up by more than a third from 11.6 million during the same period in 2022.
Johan Lundgren, CEO of easyJet, said: “Demand for easyJet’s flights and holidays has continued to grow in the half, resulting in more than a £120 million pound 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.”
In September 2021, easyjet had to tap shareholders up for £1.2 billion in rights issue that was widely supported. It also fended off a takeover approach from rival budget flyer Wizz Air, an offer that was seen as speculative but added to concern about the wider industry and what might happen to consumer choice post-pandemic.
Lundgren said at the time that the capital raise should help it take advantage of new opportunities as British Airways and Air France retreat from some markets.
Easyjet shares rose 15p to 526p today, leaving the business valued at £4 billion.
Lundgren added: “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.
Emma Carr, retail partner at Gowling WLG, said:
"Shareholders will take confidence from these results. It looks like the new cost control measures, new route additions and a strong balance book has helped to keep the company steady as we predicted back in January. The focus will now be on the future and what more easyJet can do and offer to its customers to keep this trend. With that in mind its aims to decarbonise its fleet and offer a sustainable fuel alternative for air travel will be one to watch and will likely prove invaluable in the years ahead as the pressure to reach net zero by 2050 gathers further pace."
Richard Hunter, Head of Markets at interactive investor, said: “easyJet has continued its flight back towards financial safety after a strong Easter showing and the promise of a busy summer period to come.”
