EasyJet to make £110m to £120m profit
EasyJet has revealed it expects to make a £110m to £120m pre-tax profit this year in spite of a £185m increase in its annual fuel bill, but the airline warned that its scaled-down capacity growth for this winter might be cut back even further.
In its interim third quarter statement, easyJet said it had seen a 16% rise in passenger numbers and a 32% increase in revenue for the three months to the end of June.
The low-cost carrier’s total passenger numbers for the quarter grew to 11.5million; the majority of growth was around London Gatwick, France, Italy and Spain. Non-UK originating traffic increased by 25% while UK originating passengers grew 9%.
Total revenue per seat grew 12% to £46.36, with passenger revenue up by 4%. The airline was helped by the strong euro and a 93% growth in ancillary revenue following the introduction last October of a charge for check-in luggage, which was increased to £5 per bag at the end of March.
The airline said revenue performance was encouraging across its network of 356 routes, but added that Belfast and Madrid were ‘challenging’.
Capacity growth for the winter has already been scaled back to between 4% and 6% and Easyjet said further adjustments might be necessary. Already, 12% of capacity at Stansted has been chopped for the winter.
“In the current environment flexibility is vital and easyJet continues to review its schedule and may make further adjustments both to eliminate unprofitable flying and to seize any opportunities that may arise as capacity exits the market,†said the report.
Margins will be hit by the escalating cost of fuel, although easyJet has offset 50% of the rise in prices through cost and revenue performance. It currently has 28% of next year’s fuel requirements hedged at an average of $1,265 per metric tonne.
By Linsey McNeill
Linsey McNeill
Editor Linsey McNeill has been writing about travel for more than three decades. Bylines include The Times, Telegraph, Observer, Guardian and Which? plus the South China Morning Post. She also shares insider tips on thetraveljournalist.co.uk
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