Strong end to the ski season helps boost easyJet’s winter profits
Lower fuel prices and a weaker euro have helped boost easyJet’s financial performance in the first half of the year.
The airline reported a profit of £7 million in the six months to 31 March, compared with a loss of £53 million last year.
Revenue per seat grew by 0.2% to £54.91 and by 2.6% on a constant currency basis.
Chief executive Carolyn McCall said: "The profit in the half reflects the delivery of our customer focused revenue initiatives and a strong finish to the ski season as well as the benefit we received from the lower fuel price and favourable foreign exchange movements."
The airline said its performance was also driven by strong October trading, particularly UK beach and French domestic routes, the timing of Easter, and business traveller initiatives, including its first business television advertisement.
But the airline warned that French Air Traffic Control strikes in April, which forced the cancellation of 600 flights, will hit pre-tax profit by around £25 million in the second half. The news prompted its share price to fall 7% despite today’s results.
Looking to the summer, the airline said it plans to grow capacity by 6.2%, while competitor capacity on its markets is forecast to increase by 6.7%.
This means it expects revenue per seat, at constant currency, to decrease by low single digit percentage points in the second half.
As well as the strike disruption, third quarter revenue per seat will also be impacted by the movement of Easter.
Together, this is expected to lead to a fall in revenue per seat by 3 percentage points.
"This combined with a one percentage point reduction in underlying trading means we expect third quarter revenue per seat at constant currency to be down around 4 percentage points," it said.
Talking about the marketplace in general, easyJet said the European short-haul market grew by 20.2 million seats or 5.2% year-on-year in the six months to March 31 and by 6.7 million seats or 6.8% in easyJet’s markets.
Its rivals increased capacity by 5.2 million seats or 7.7% in easyJet’s markets in the period, with particularly strong growth from legacy and low-cost carriers in the London market.
In the same period, easyJet increased capacity by 1.1 million seats or 3.6%.
"The growth in the European short-haul market looks set to continue for the six months to 30 September 2015 as a result of improved economic conditions and a lower oil price," it said.
"EasyJet expects the European short-haul market to grow by 27.5 million seats or 5.5% year-on-year in the six months to 30 September 2015 and by 8.6 million seats or 6.7% in its markets."
Bev
Editor in chief Bev Fearis has been a travel journalist for 25 years. She started her career at Travel Weekly, where she became deputy news editor, before joining Business Traveller as deputy editor and launching the magazine’s website. She has also written travel features, news and expert comment for the Guardian, Observer, Times, Telegraph, Boundless and other consumer titles and was named one of the top 50 UK travel journalists by the Press Gazette.
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