Budget airline EasyJet reported a surge in winter revenues today after it increased baggage charges and bounced back from the previous year’s snow-hit performance.
The group, which operates more than 580 routes across 30 countries, said total revenues were up 16.7 per cent to £763 million in the three months to 31 December, as it raised its first-bag charge by 16.9 per cent to £4.70 per seat. Total fees and charges increased by 26.7 per cent to £5.88 per seat.
The figures were also flattered by the weak performance in the same period in 2010, which was hit by extreme weather, grounding flights and costing the group £18m.
The absence of snow disruption in the period meant EasyJet was able to keep its costs down, reducing cost per seat excluding fuel by 1.6 per cent, while it also took advantage of retrenching competitors, which cut capacity in the face of higher costs.
Shares in EasyJet soared by more than 9 per cent after the update.
The carrier said it now expects to recover most of the £100m increase in its first-half fuel bill, meaning interim losses will be contained between £140m and £160m. This compares to a loss of £153m a year earlier.
Wyn Ellis, an analyst at Numis Securities, upgraded his full year pre-tax profit forecast from £193m to £225m, compared to £248m the previous year.
The Luton-based group, which has a 200-strong fleet of aircraft, said passenger numbers were up 8.1 per cent to 12.9 million in the period, while total revenues per seat were up 9.2 per cent to £51.83.
Chief executive Carolyn McCall said: “EasyJet has made a strong start to the year. This is due to firm control of costs, the strength of EasyJet’s network, tight capacity discipline and pricing actions taken in the second half of the last financial year.”
EasyJet added that non-seat revenue declined marginally as a strong performance of in-flight sales, which includes duty-free purchases, was offset by a drop in the travel insurance market.
The carrier reported a slight increase in business passengers, up 200,000 to 2.3 million in the period, despite a wider decline in the corporate travel market.
In January this year, after the reporting period, EasyJet changed the presentation of fees and charges on its website in line with recommendations made by regulators after concerns customers were being misled.
The first-quarter update gave no mention of the group’s ongoing spat with its founder Sir Stelios Haji-Ioannou.
Stelios wrote to Prime Minister David Cameron last week accusing EasyJet’s board of softening performance targets in order to make a £7m share payout for executive directors more easily attainable.
Stelios, who founded the airline in 1995, has also reportedly written to the company’s largest institutional investors to raise his concerns about aircraft acquisitions by EasyJet and the group’s strategy.
The company thought it had seen an end to the dispute after it promised £190m in dividends to investors, landing the airline’s founder and his family about £70m. The company will hold its annual meeting on 23 February at Luton airport.
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Monday 20 May 2013
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