Budget airline easyJet has emerged as the biggest winner on the FTSE 100 after revealing strong results for the last quarter and predicting another record-breaking summer period. The carrier’s share price jumped by 6.1% to 453.9p per share in Wednesday trading following the announcement.
In the three months leading up to June, easyJet reported a significant 11% increase in total revenues, reaching £2.6 billion. This surge in revenue resulted in a 16% increase in headline pre-tax profit, totaling £236 million. Passenger revenues for the airline saw a 7% year-on-year improvement, reaching £1.6 billion, while ancillary revenues climbed by 11% to £693 million. Notably, easyJet Holidays, the company’s package trip division, experienced a 42% rise in turnover to £336 million, exceeding expectations.
It is anticipated that easyJet Holidays will generate pre-tax profit exceeding £180 million for the full year, up from the previous guidance of above £170 million. The airline flew 28.1 million seats in the last quarter, marking a 7% increase compared to the previous year. The number of passengers carried by the airline rose to 25.3 million from 23.5 million, with total airline revenue per seat improving by 1% to £81.61, attributed to a 4% rise in ancillary revenues per seat. However, total costs per seat also increased by 1% to £75.82 due to a rise in fuel costs.
Chief executive Johan Lundgren attributed the strong performance to an increased number of customers choosing easyJet for its extensive network of destinations and value for money. Despite Easter falling into March this year, travel remains crucial, positioning the airline on track to deliver another successful summer and edge closer to reaching its medium-term targets.
easyJet noted that bookings for the final quarter are steadily increasing, with 69% of its seats already sold. The airline has 7% more capacity available for the fourth quarter compared to the same period in 2023. Notably, 1.5 million more seats have been sold for the peak summer period this year compared to last year, indicating solid demand for the airline.
Analyst Adam Vettese of eToro hailed easyJet’s impressive results, particularly the 16% increase in profit and strong demand anticipated for the upcoming July to September period. The contrast with Ryanair’s recent disappointing performance is evident, as the Irish airline reported a 46% drop in profits for the June quarter. Ryanair’s decision to reduce prices to attract more price-savvy consumers has led to a prediction of significantly lower fares for the current quarter.
Vettese noted that although a race-to-the-bottom in prices would not benefit easyJet, the airline is not as exposed to the Boeing-related issues faced by Ryanair. Additionally, easyJet’s success in package holidays has contributed to its strong performance. With the airline’s promising outlook and solid demand, easyJet remains a leader in the budget airline sector and sets the stage for a successful summer season.
