Easyjet (EZJ) share price rises as it narrows losses and first-half revenue soars by 20 per cent to hit £2bn
Easyjet racked up revenue topping £2bn for the first time in its first-half results, citing a boost from failed rivals and soaring ancillary sales.
It also trimmed its loss, from £236m for the six months ended 31 March 2017 to £68m for the same time this year. The loss is mainly due to the costs from expansion of operations at Berlin’s Tegel airport, with Easyjet picking up collapsed carrier Air Berlin’s operations there in December and starting flights in January.
Easyjet shares rose by 2.79 per cent in early trading, leading the FTSE risers.
The carrier has announced a number of new joiners to its board, with Garry Wilson joining as head of Easyjet Holidays, Luca Zuccoli joining as chief data officer and Flic Howard-Allen becoming group communications director. Thomas Haagensen has been appointed to the newly created role of group markets director, which the airline said would provide “a clear voice for Europe within the business”.
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The figures
Total revenue rose by nearly a fifth to £2.2bn, up from £1.8bn this time last year, and total revenue per seat increased by nearly 11 per cent to £54.10
Passenger numbers for the six months to 31 March 2018 rose by 3m to 36.8m, including 700,000 from its new Berlin Tegel operations which got underway in January.
Headline cost per seat excluding fuel rose by 2.2 per cent to £43.11, and increased by 1.6 per cent at constant currency, which Easyjet said was due to increased loads, inflationary costs and the hit from severe weather.
Looking ahead, its forward bookings are ahead of last year – at 80 per cent for the third quarter, and 57 per cent for the second half, and the airline’s capacity growth excluding Tegel in the second half is expected to be around five per cent.
It expects headline profit before tax for the year to 30 September, including the headline loss at Tegel, to be in the range of £530m to £580m.
Why it’s interesting
The airline said its performance was boosted by capacity reductions by other carriers in its markets, and the partial move of Easter into the first half from the second half in 2017.
Easyjet did though say at Tegel, it expects the headline loss before tax to rise to between £75m and £95m, due to a higher fuel price and additional regulated security and noise tax charges, along with the potential risk of lower revenue from its finalised schedule.
The airline has been tapping into further potential of ancillary revenue – which is non-ticket sources such as baggage fees and on-board food and services, saying it had improved its bag offerings for passengers.
What the company said
Johan Lundgren, Easyjet’s chief executive said the performance was “helped by the reductions in capacity from other airlines”.
He said:
Easyjet has delivered an excellent performance reporting a profit of £8m, one of our best results ever in the winter trading period (excluding the one-off impact of the start-up of our Tegel operation).
Total revenue was above £2bn for the first time, up almost 20 per cent year on year. This was driven by a record number of passengers at 37m and our highest ever ancillary sales due to giving passengers more options and lower prices on hold luggage along with our improved inflight bistro.
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