EasyJet expecting substantial profit rise
Low-cost airline easyJet forecast a “substantial” improvement in profits after passenger numbers jumped 9% in its most recent quarter.
Luton-based easyJet said the bulk of the increase came from outside the UK as it targeted growth markets with expansion at airports such as Milan Malpensa, Madrid Barajas and Paris Orly.
The number of non-UK originating passengers increased by 20% in the final quarter of 2009, accounting for 54% of all passengers.
Overall, the company carried 11m customers in the quarter as revenues lifted 10% to £607.5m and average revenue per seat improved by a bigger-than-expected 4.2% to £47.50.
Weather-related disruption closed a number of airports during December, but easyJet said it still managed to fly nearly 90% of its programme.
Chief executive Andy Harrison said: “Economic conditions remain challenging and we continue to expect a tough trading environment.
“However, the underlying performance of the business in the first quarter has been encouraging and easyJet remains on track to deliver substantial profit improvement during 2010.”
EasyJet shares opened more than 3% higher yesterday.
Easyjet's profits were down 65% to £43.7m last year, but it was one of the few carriers to make a surplus in the recession.
The performance this year should be helped by a £100m boost from lower fuel prices.
And with more than 65% of winter seats now sold, easyJet said its first half revenues were likely to be better than initially forecast. It added the improvement should offset additional costs resulting from the weather disruption.
Overall, it expects losses in the seasonally quieter first half of the financial year to be in the range of £80m and £95m — representing a “significant improvement” on the same period a year earlier.
The airline said it had grown capacity by 14% in mainland Europe, including by 33% at Milan and by around 20% at Paris and Madrid.
In the UK, it grew by 11% at Gatwick and by 60% at Manchester, but capacity was reduced at weaker performing bases such as Luton and at East Midlands, where the company recently announced it will no longer have a presence.