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EasyJet expects bigger profits as summer bookings soar EasyJet expects bigger profits as summer bookings soar
(about 1 hour later)
Budget airline has ramped up capacity and expects to be back to about pre-Covid levelsBudget airline has ramped up capacity and expects to be back to about pre-Covid levels
EasyJet has lifted its profit outlook for this year after summer bookings surged and passenger numbers over Easter returned to pre-pandemic levels. The boss of easyJet said the travel industry was much better prepared for this summer than last year when staff shortages led to chaos at airports, although he warned that ongoing strikes could cause some disruption.
The budget airline has increased capacity, by 40% from January to March, and expects to be back to about pre-pandemic levels in the summer. The budget airline lifted its profit outlook for this year after summer bookings rose and passenger numbers over Easter returned to pre-pandemic levels.
Its package holidays are 80% sold for this summer and with UK demand strong, the company expects 60% growth for the division compared with last year, up from 50% estimated previously. Johan Lundgren, the easyJet chief executive, said the airline had completed its largest ever crew recruitment drive and had received a number of applications more than eight times the roles available.
At Easter, demand was strong and easyJet operated an average of about 1,600 flights a day. Passenger levels were back to 2019 levels, despite disruption from French air traffic control strikes through April. “We are fully recruited in terms of cabin crew and pilots but of course the difficulty is that you will see weaknesses across the industry in other parts of the chain but everybody is significantly better prepared than they were at this point last year,” he said.
Despite higher fuel costs, the airline expects to beat analysts’ expectations of a profit of £260m this year, as it raises ticket prices. Last year, easyJet made a headline loss before tax of £178m. “Strikes are likely to continue … what you have to do is be able to mitigate the impact” by having extra staff to help deal with delays and booking travellers on to other flights, he added. There have been strikes in various sectors across Europe, affecting travel at German and French airports in recent weeks.
The company said it had completed its largest ever crew recruitment campaign. Airlines hope to avoid a repeat of last summer when staff shortages led to massive queues at airports, delays and tens of thousands of flights being cancelled. The travel industry struggled to cope with a surge in demand after governments ditched Covid-19 travel restrictions. At the height of the pandemic, thousands of staff were laid off as flights were grounded. At Easter, demand was strong and easyJet operated an average of about 1,600 flights a day, and it expects this to increase to 1,900 a day in the summer. Passenger levels over Easter were back to 2019 levels, despite disruption from French air traffic control strikes through April.
Since then, the industry has bounced back, as people are keen to travel again after Covid lockdowns and travel bans. Airlines hope to avoid a repeat of last summer when staff shortages led to massive queues at airports, delays and tens of thousands of flights being cancelled. The travel industry struggled to cope with a surge in demand after governments ditched Covid-19 travel restrictions. At the height of the pandemic, thousands of staff were laid off as flights were grounded.
EasyJet flew 15.6 million passengers between January and March, up from 11.5 million a year earlier. Its load factor, which measures how full planes were, improved to 88% from 78%. Since then, the industry has bounced back, with people keen to travel again following Covid lockdowns and travel bans.
The airline anticipates that it will make revenues of £2.7bn in the first half to the end of March, against costs of £3.1m, resulting in a half-year loss before tax of between £405m and £425m. The cost of living crisis has not dented demand, Lundgren said. “While there is a squeeze on people’s incomes, people prioritise holidays and travel even more than they did before. This is driven by the fact that people are refocusing on experiences and doing things rather than investing in their homes perhaps,” he added.
He said holidaymakers booked longer breaks of up to 12 days during the pandemic, but this had since reduced to seven days as patterns returned to normal. However, there are some other changes: 23% of bookings are now made on mobile phones compared with 16% before the pandemic, and there has been a 10% increase in the number of people paying extra to choose their seats.
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Johan Lundgren, the chief executive said: “Demand for easyJet’s flights and holidays has continued to grow in the half, resulting in … a £1bn revenue improvement year on year. EasyJet has increased capacity, by 40% from January to March, and expects to be back to about pre-pandemic levels in the summer. Its package holidays are 80% sold and with UK demand strong, the company expects 60% growth year on year, up from 50% estimated previously.
“We see continued strong booking momentum into summer as customers prioritise spending on travel.” Traditional beach destinations are popular including Málaga, Menorca, Faro and Alicante, as well as city breaks such as Amsterdam.
Despite a 71% rise in fuel costs, the airline expects to beat analysts’ expectations of a profit of £260m this year, as ticket prices have gone up by 31% or an average £12 a ticket. Last year, easyJet made a headline loss before tax of £178m. However, it will still be in the red in the first half with a loss of between £405m and £425m expected.