EasyJet predicts narrowed first half loss

Dino D'Amore
By Dino D'Amore January 27, 2015 21:15

EasyJet predicts narrowed first half loss

In a trading update, easyJet has stated that it expects to report a smaller first-half loss in its current financial year after revenue rose on the back of strong demand from business and leisure travellers and falling fuel costs.

For the fourth quarter 2014, easyJet’s seats flown grew by 2.9% to 16.6 million. Passengers carried increased by 4.1% to 14.9 million, and the load factor increased by 1.0 percentage point to 89.7%. The total revenue for the airline grew by £34 million to £931 million and revenue per seat grew by 0.8% on a reported basis to £56.16 per seat or by 3.7% at constant currency.

easyJet stated that its full year cost per seat is “expected to be in line with the guidance given at the full year results and be up by 2% on a constant currency basis.  As expected in the quarter cost per seat excluding fuel decreased by 0.2% on a reported basis and increased by 3.7% on a constant currency basis”.

The increase at constant currency was primarily driven by anticipated increases in charges at regulated airports, mainly in Germany and Italy, crew costs associated with building a resilient operation ahead of base openings, the phasing of marketing expenditure on the business traveller punctuality campaign and an increase in maintenance costs associated with the planned ageing of the fleet, the airline said.

Cost per seat including fuel decreased by 2.0% on a reported basis and increased by 1.6% on a constant currency basis.

With first half bookings in line with last year, easyJet expects to report a first half loss before tax of between £10 million and £30 million assuming normal levels of disruption compared to the £53 million loss reported in the first half of last year.

Commenting on the results, Carolyn McCall, easyJet Chief Executive said: “easyJet has made a good start to the year by continuing to deliver its strategy of making travel easy and affordable for passengers.  We enjoyed a strong October across the network – particularly on UK leisure flights to beach destinations and on French domestic routes where we continued to build passenger numbers after a busy September.”

“We further strengthened our network in the quarter adding around 500,000 seats, the majority of which are from airports where easyJet has a number one or number two position.  This combined with our new TV ads aimed at business travellers enabled easyJet to sell record numbers of seats to business travellers in the first quarter.”

“easyJet is well positioned to continue to deliver returns and growth to shareholders.”

Dino D'Amore
By Dino D'Amore January 27, 2015 21:15