By I. Hansana, Jadetimes News
EasyJet is forecasting a record breaking summer travel season following a 16% increase in profits for the latest quarter. This optimistic outlook contrasts with Ryanair, which recently reported a significant earnings drop and a bleak summer forecast, affecting European airline stocks negatively.
EasyJet's pre tax profits rose to £236 million for the quarter ending in June, driven by an 8% increase in passenger numbers and an 11% rise in total revenues to £2.6 billion. CEO Johan Lundgren highlighted that the airline had sold 1.5 million more seats for the peak season compared to last year, setting the stage for another record breaking summer.
In the recent quarter, EasyJet filled 28.1 million seats, a 7% year on year increase, with a load factor reaching 92% in June. Despite a 7% drop in EasyJet’s share price following Ryanair’s announcement of halved profits and a challenging summer outlook due to falling ticket prices and late bookings, EasyJet remains optimistic. The airline reported that summer bookings continue to grow, with 69% of tickets sold, up from last year.
Lundgren differentiated EasyJet from Ryanair, noting that their networks overlap by only about 20%. He mentioned that EasyJet Holidays, with a profit before tax up 49% year on year to £73 million and a 33% rise in passenger numbers, has been a significant contributor. The annual profit target for EasyJet Holidays was increased from £170 million to £180 million.
Revenue per seat also saw a 1% year on year increase, expected to persist through the summer. Popular destinations like Turkey and the Greek islands are performing well, unaffected by extreme heat or recent anti tourism protests in some Mediterranean countries. Lundgren acknowledged local concerns about overtourism but noted it hasn’t impacted travel, emphasizing the economic dependency of places like Mallorca on tourism.
The positive results boosted EasyJet’s shares by almost 6% in early trading, recovering from earlier losses. Richard Hunter of Interactive Investor commented on the strong market reaction, suggesting investor confidence in EasyJet's prospects remains high. He highlighted the resilience of family holidays, which continue to drive demand for EasyJet’s competitively priced flights and holiday packages.
