Still tough times ahead – EasyJet
Tuesday, 21 Jan, 2010
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Easyjet has warned that economic conditions “remain challenging” and the budget carrier continues to expect a tough trading environment.
The forecast came as the airline reported total revenue up by 10.5% to £607.5 million in the three months to December 31.
The number of passengers carried in the quarter was 11 million, a rise of more than nine per cent over the same period a year earlier, with more than half originating from outside the UK.
But the airline had £8 million of additional costs resulting from the “unprecedented” level of
weather-related disruption at European airports at the end of December. Despite this the
airline managed to fly nearly 90% of its programme
The load factor increased by 2.4 percentage points in the quarter to 85.8% and total revenue per seat improved by 4.2% to £47.50 in the quarter, (down 0.4% per seat on a constant currency basis).
Ancillary revenues grew by 14% per seat to £9.90 driven by growth in the checked bag charge which increased by £0.42 to £4.39 per seat and an 18% per seat growth in ancillary revenues excluding the checked bag charge.
In-flight revenue benefited from improvement in spend per head which reached £2.
EasyJet’s first half performance and consequently the 2010 first half pre-tax result is expected to be a loss in the range of £80 million to £95 million, described as a “significant improvement” compared to the first half of the prior financial year.
Yield performance and any future levels of weather related disruption are the key variables, it added.
“Economic conditions remain challenging and we continue to expect a tough trading environment,” the airline said.
“However, the underlying performance of the business in the first quarter has been encouraging and easyJet remains on track to deliver substantial profit improvement during 2010.”
Chief executive Andy Harrison said: “EasyJet was the best performing European airline during 2009 because we offer the lowest fares to the most convenient airports. easyJet has continued to deliver a superior performance into the first quarter of our new financial year.
“The strength of customer demand has allowed us to grow passengers flown by nearly 10% with virtually no yield deterioration, slightly ahead of our initial expectations.
“However, the underlying performance of the business in the first quarter has been encouraging and EasyJet remains on track to deliver substantial profit improvement during 2010.”
Looking forward, the airline said capacity, measured in seats flown, for both the first half and the full year is expected to increase by around 10%.
With over 65% of winter seats sold, first half revenue is performing “better than initially forecast”. EasyJet now expects total revenue per seat at constant currency to be only “slightly down” in the first half of the year compared to the prior period.
Forward bookings are slightly ahead of the prior year.
EasyJet said its pre-tax result in 2010 at current fuel prices and exchange rates is expected to benefit by around £60 million in the first half of the year and £100 million for the full year from the positive contribution of lower dollar fuel prices as higher price fuel hedges roll off and a stronger euro, partially offset by the negative impact of a strengthening US dollar.
by Phil Davies
Phil Davies
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