In a trading statement covering the six months to 31 March, easyJet said it expected a pre-tax loss of £340-£360 million for the winter period, which is traditionally loss-making. The exception is easyJet holidays, which is forecast to make a profit before tax of around £31 million, triple the previous year, following a 42% growth in sales.
EasyJet also put its improved position down to targeting capacity where demand was strongest, which helped overcome cost increases of 6% and the £40 million drop in revenue caused by the Middle East crisis. The forecast was also buoyed by the early Easter.
It said: “Pricing was very strong at the start of the period, with October seeing revenue per seat of +12% year-on-year. However, the onset of the conflict in the Middle East on 7 October resulted in a pause in flights to Israel and Jordan and a temporary slowdown in flight bookings for the wider industry.”
Looking ahead, easyJet said summer 2024 bookings “continue to build well, with an increase in volume and pricing compared to the same period last year”. Currently, the peak summer seat-only programme is 60% sold, up one percentage point. EasyJet holidays is currently 70% sold for this summer.
Johan Lundgren, easyJet chief executive, said: “Our growth and focus on productivity have reduced winter losses by more than £50 million.
“We are well set up operationally for this summer season where we expect easyJet to be one of the fastest growing major airlines in Europe and take more customers on easyJet holidays than ever before.”
The results show easyJet earned almost half its winter flight revenue from ancillary sales. These reached £910 million, compared with £2 billion in ticket sales.
"Ancillary growth, at 19%, was just ahead of seat revenue. Average ticket prices, at £48.34, were up 5%, while ancillary sales per seat were £21.53, up 6%."
‘Positive trends’
Julie Palmer, partner at financial advisory Begbies Traynor, said: “Across the board, easyJet has introduced operational improvements and delivered capacity growth with an 8% year-on-year increase in passenger numbers helping to contribute to the improved revenues.
“So, while the low-cost-carrier might have announced expected winter losses of around £350m, this is a marked reduction on the same period last year as it looks to achieve year-round profitability."
Palmer said heading into the "all-important summer months", easyJet’s momentum would likely continue "with the airline noting a rise in bookings and further price increases compared to last year".
“The group will also be buoyed by the positive trends seen in its holiday business, with the division reporting how 70% of its summer programmes have already been sold and further customer growth," Palmer continued.
“Unfortunately, today’s improved numbers are overshadowed somewhat by the ongoing geopolitical uncertainty in the Middle East.
"EasyJet might be able to redeploy the flights it had intended for Israel over the next six months, but even this temporary change highlights how susceptible airlines have been of late to events beyond their control."
