EasyJet bag charge cuts losses
Low-cost airline easyJet said that half-year losses would be smaller than expected as its revenues were boosted by higher baggage charges.
The Luton-based group, which operates more than 580 routes across 30 countries, said revenue growth per seat in the six months to March 31 will be better than expected at 10%, with around half the improvement driven by higher fees and charges.
EasyJet also received a boost from the unseasonably mild weather experienced in the period, which led to "unusually" low levels of cancelled flights, while an uplifting TV advertisement featuring music from Liverpudlian rockers The Wombats also helped.
The improved performance means the group now expects to report a pre-tax loss for the six months to March 31 of between £110m and £120m, compared with previous expectations of £140m to £160m and a £153m loss last year.
The group, like many airlines, always reports a loss in the first half of its financial year.
Shares in easyJet opened 5% higher after the update.
The group previously reported higher revenues for the first three months of its financial year as it raised its first-bag charge by 16.9% to £4.70 per seat. Total fees and charges increased by 26.7% to £5.88 per seat.
The group, which has a 200-strong fleet of aircraft, said total cost per seat for the whole year is expected to increase 2%, assuming no significant disruption arising from events such as airspace congestion during the Olympics.
Meanwhile, the airline today announced that passengers could get allocated seats in a new trial.
All flights from Luton to Sharm el Sheikh, Glasgow to Alicante, Luton to Malaga, Luton to Alicante and Luton to Istanbul are part of the trial run scheduled to start next month.