EasyJet reported that its forward booking trend was returning to normal, and it reduced its losses by £134 million in the first six months. It also increased its full-year forecast for its holiday business.
EasyJet Holidays, the budget airline that competes with Ryanair to be the best in Britain, expects a profit before tax of at least 80 million pounds sterling after reporting a year-over-year growth in customers of over 200 percent in the first six months.
The company said that its holiday business, which had previously only been operated from the UK, will now be operating out of new markets. The first of these is Switzerland for holidays departing in early 2019.
The airline, who carried around 600,000 tourists in the first half of the year, announced that Switzerland will be the first new European holiday market. The multi-currency platform of its technology would allow it to quickly expand into other source markets.
EasyJet CEO Johan Lundgren said: “EasyJet’s optimised network, combined with strong demand for flights and holidays and enhanced revenue capabilities, operational resilience and flexibility, means that we enter the summer confidently.”
According to him, recent research has shown that customers are increasingly choosing low-cost brands and airlines in order to get the best value for money.
The company reported that the holiday business generated incremental revenues of £173million in the six-month period ending in March. This is up from £54million in the same time frame last year. These revenue increases contributed to a total group revenue of £2.7billion, up £1.5billion from this time last.
As the industry recovered from Covid-19 and all travel restrictions were removed, passenger revenue in first half increased from £985 to £1.75billion, while ancillary revenues increased from £459 to £767m.
The number of passengers increased by 41% to 33.1 millions, largely due to a 25% increase in seats flown (to 37.9million) and a 10.2 point increase in load factor (87.5%). Its medium-term goal is to increase capacity to 105 millions seats.
Losses Before Tax and Exclusions shrank to £411 Million, which is in line with the guidance of a loss between £405 Million and £425Million. The group’s headline costs rose by 52 percent to £3.1 billion, mainly due to a large increase in fuel prices and inflationary pressures.
EasyJet has indicated that the trend is beginning to normalise. Analysts believe this will improve visibility to modest levels.
Lundgren said that easyJet’s growth target could be met without a shortage of aircraft. He said that 163 Airbus aircraft will be delivered over the next 5 years. He said: “We don’t think we will run out of metals or aircraft to meet our growth ambitions.” “We believe we are in a good position with our order book.”
Lundgren stated that of the 163 aircraft on order, which are a mixture of A320neos & A321neos, some would replace older models while others will add new routes. He also highlighted that 18 planes will arrive in 2019 and increase capacity by 10%.
EasyJet’s shares rose by 4 1/2p or 0.9 percent to 525p during morning trading.