The budget airline easyJet is predicting a record-breaking summer of travel after profits jumped 16% in its most recent quarter of trading.
The bumper figures come only two days after the rival no-frills carrier Ryanair reported a plunge in earnings and a poor outlook for the holiday getaway season, pushing down many European airline stocks.
EasyJet said pre-tax profits climbed to £236m in the three months to the end of June, as passenger numbers rose by 8%, fuelling an 11% rise in total revenues to £2.6bn.
Johan Lundgren, the chief executive of easyJet, said the airline had sold 1.5m more seats for peak season than at the same time last year, which “means we remain on track to deliver another record-breaking summer”.
EasyJet said it had filled 28.1m seats in its most recent quarter, up 7% year on year, with load factor across its fleet hitting 92% in June.
Jittery investors slashed 7% from easyJet’s share price on Monday after Ryanair said its profits had halved over the same April to June period and forecast a tough summer amid falling ticket prices hindered by a wider market trend of customers leaving booking their summer flights until late.
However, easyJet said on Wednesday that its bookings for the summer quarter “continue to build”, with 69% now sold, up a percentage point on the same period last year as the airline increased the number of tickets on sale by 7%.
Lundgren distanced his airline from Ryanair: “We don’t actually have the same network. We overlap just about, I think, 20%. [easyJet] Holidays makes a difference. When you’re looking at the fares, it’s pretty much in line with last year. The average fare for the [last quarter] was £73.”
Revenue per seat from travellers also increased by 1% year on year in the quarter, with that bump expected to continue through the summer period.
EasyJet said its holidays offering performed strongly, with profit before tax up 49% year on year to £73m as passenger numbers soared by 33%. The airline increased its annual profit target for easyJet holidays from £170m to £180m.
Lundgren said destinations and sales appeared unaffected by either extreme heat or the recent protests in some Mediterranean countries against mass tourism: “If you’re looking through what is the most popular one, it would be kind of the usual suspects. Turkey and the Greek islands, that whole area is doing really well for us – there’s no big difference.”
He said local concerns about overtourism was an issue that had come up from time to time, and easyJet was “mindful” of it, but it was not impacting travel. “Mallorca’s GDP dependency on tourism is close to 50%, as an example, but that needs to be fairly and evenly distributed,” he said.
The results and outlook helped send easyJet’s shares up almost 6% in early trading, all but wiping out the losses earlier in the week.
“The strong share price reaction to this update at the open adds to investors remaining defiantly confident that sunnier times are returning and that the group is on a strong flight path,” said Richard Hunter, the head of markets at Interactive Investor.
“There seems to be an increasing body of evidence to suggest that the family holiday remains almost sacrosanct and outside of normal budgetary restraints, which has played into the hands of easyJet and its keenly priced offerings of flights and holiday packages.”
