FUEL COSTS HIT EASYJET’S HALF-YEAR RESULTS

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By TESTCustomwebLP TESTCustomwebLP May 10, 2011 10:42

FUEL COSTS HIT EASYJET’S HALF-YEAR RESULTS

UK low cost carrier easyJet has posted a pre-tax loss of £153 million. The fuel cost increase accounts for £43 million and increased passenger taxation accounts for £21 million of the £74 million increase in pre-tax loss compared with the prior year. The airline said it a statement that the loss was in line with expectations.

Total revenue at constant currency per seat fell by 2.1%, (2.7% on a reported basis) in part due to increased passenger departure taxes and charges. Capacity growth at bases in Europe temporarily impacting yield has been offset by robust revenue performance in the UK, the airline said.
easyJet passenger numbers grew by 11.6% to 23.9 million with 59% of passengers now originating outside the UK, an increase of 5 percentage points compared to the prior period. Load factor improved by 0.4 percentage points to 85.4%. Ancillary revenue per seat improved in the second quarter and as a consequence was broadly flat for the six months at £10.20 per seat.

Cost per seat (excluding fuel) decreased by 2.8% for the half year excluding the costs of snow and strike disruption in the first quarter. After the impact of this disruption, cost per seat excluding fuel fell by 1.2% on a reported basis. Good cost control has meant that unit costs reduced across all lines with the exception of crew costs where easyJet has invested to improve operational robustness and flexibility.

The UK airline stressed that good progress has been made in implementing the strategy including putting in place the building blocks for the roll-out of easyJet’s business traveller proposition in the second half of the year. On time performance (OTP) also improved in the second quarter, which averaged 81% compared to 66% in the previous year. Also easyJet stated that forward bookings are in line with the prior year. “With nearly half of summer seats now sold second half total revenue per seat at constant currency is slightly ahead of the prior year,” the airline said.

Commenting on the results, Carolyn McCall easyJet Chief Executive said: “The past six months has been tough with sharply rising fuel costs combined with cautious behaviour by consumers and an adverse impact from taxes on passengers. Despite this difficult environment we have made strong progress over the past six months in implementing the strategy outlined following our review of the business last year. Our top team has been rebuilt and we continue to optimise the network by configuring flight frequencies and destinations which are attractive to business travellers. We have also made use of the commercial freedom granted by the brand licence agreement and delivered progress in controlling costs. Our operation is now robust and we are well placed to successfully deliver our summer flying programme.

“Our cash generation remains strong and these results show that the steps we are taking are already having a positive effect.”

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By TESTCustomwebLP TESTCustomwebLP May 10, 2011 10:42
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