EasyJet Set For Record Profits Despite Mounting Challenges

EasyJet is on course to achieve record profits this year, though several challenges threaten to impact its final performance. The airline, which has seen its stock rally in recent months, warned that industrial action by French air traffic controllers, rising fuel prices, and a shift towards later bookings by passengers could dampen full-year results.

Despite these uncertainties, EasyJet reported a strong performance in its third quarter, with pre-tax profits rising 21 per cent to £286 million. This was bolstered by a later Easter getaway, which significantly contributed to its revenues. However, the airline remains in the red for the first nine months of its financial year, with cumulative losses of £108 million following larger deficits in the winter months.

Analysts had initially forecast full-year profits of £709 million but have now revised this estimate down to £660 million. In its trading update, EasyJet signalled it may achieve record figures, as analysts project approximately £800 million in profits over the summer peak season. This follows last year’s figure of £610 million, which included £190 million from its thriving package holiday business.

The company’s holiday division, which has grown significantly since the global slowdown caused by the Covid-19 pandemic, is expected to deliver £235 million in profits this year. This would represent a 24 per cent year-on-year increase and account for around a third of EasyJet’s overall earnings.

In a statement, EasyJet commented positively on its year-to-date performance and reiterated its confidence in achieving solid profit growth year-on-year. However, it singled out disrupted operations caused by French air traffic control strikes as a significant cost driver. Rising fuel prices, linked to geopolitical instability in the Middle East, have also added pressure on the business.

The airline reported strong passenger numbers in the spring quarter, carrying 25.8 million travellers across its 344-aircraft fleet. Revenue for the period was up nearly 11 per cent year-on-year, reaching £2.91 billion. Chief Executive Kenton Jarvis, who assumed his role earlier this year, remarked on the company’s operational improvements and progress while highlighting dissatisfaction with the impact of strike actions on both customers and crew.

The outlook remains cautiously optimistic for the remainder of the year, with the airline banking on summer bookings to hit its targets despite external challenges.