Easyjet grows revenue in ‘robust’ quarter as new COO joins
Easyjet boosted revenue 11 per cent to £1.8bn in its third quarter, the airline revealed today, saying it is on schedule to hit market expectations on profit.
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The airline also posted higher passenger revenue, growing that 10.7 per cent year on year to record £1.4bn.
Meanwhile the number of passengers rose by 2m to hit 26m for the quarter.
Ancillary revenue rose 14.3 per cent to £374m.
Chief executive Johan Lundgren hailed the solid quarter’s trading and said the flyer should deliver profit before tax of between £400m and £440m.
“Easyjet’s third quarter performance was robust and despite the tougher macroeconomic conditions was in line with expectations,” he said.
“We remain very focused on delivering our revenue initiatives and driving costs down to enhance our profitability per seat.”
He added: “Our customers experienced significantly reduced cancellations and long delays largely as a result of our investment in operational resilience, which also contributed significantly to driving down cost per seat ex fuel at constant currency by four per cent in the period.”
Revenue per seat climbed 0.7 per cent in constant currency, partly due to the late arrival of Easter, which provided a £40m boost.
However, “softening demand” due to macroeconomic uncertainty across Europe and Brexit-related consumer uncertainty hurt Easyjet.
It also pointed to headwinds from Monarch Airlines’ and Air Berlin’s bankrupticies, and France’s yellow vest protests, as challenges.
The flyer also appointed ex-Ryanair executive Peter Bellew as chief operating officer.
The firm expects to hit its full-year targets, including growing full-year capacity by 10 per cent, though second half revenue will be slightly down, as per guidance.
The results follow Ryanair’s warning earlier this week that delays to the return of Boeing’s 737 Max jet will hurt its summer 2020 schedule.
Easyjet shares ticked up 3.8 per cent on the news, as investors hailed news it will likely hit record second half profit.
“After a record loss in the first half, that still means full year profits will be significantly behind last year though,” pointed out Laith Khalaf, senior analyst at Hargreaves Lansdown.
While praising the flyer’s cost control, Khalaf added that various “weighty factors” could hurt profitability this summer, chief among them Brexit and strike action.
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“Easyjet’s latest numbers are encouraging, but there are still plenty of uncertainties waiting in the wings,” he said.
“The airline will be hoping for a quiet summer with minimal disruption to flight schedules.”