EasyJet on track to narrow losses after strong first quarter

By HOLLY WILLIAMS AND GARETH MACKIE
Published on 24/01/2013 08:58

Budget airline EasyJet today said it expects lower half-year losses after a strong start to the ski season and record numbers of business travellers.

Revenues for the three months to 31 December rose 9.2 per cent to £833 million, with passenger numbers up 6.2 per cent to 13.7 million.

As a result, the group expects to deliver a strong improvement in first half figures, which traditionally show a seasonal loss for the airline, with EasyJet forecasting pre-tax losses of between £50m and £75m, down from £112m a year ago.

The “exceptionally mild” weather seen in the quarter helped limit disruption, with the airline cancelling 64 flights during the three months, against 236 a year earlier.

But it said the heavy snow and adverse weather over the past week had since caused a surge in cancellations, at around 200 between Friday and Sunday alone, with French airports the worst affected.

Investec analyst James Hollins said: “The key takeaway from the statement is a clear commitment, in our view, to a major new aircraft order that could raise the wrath of EasyJet’s major shareholder.”

The carrier’s founder, Sir Stelios Haji-Ioannou, said earlier this week that he would sell more shares in the company if it placed another aircraft order, arguing that its current fleet was too big.

Stelios and his family own just under 37 per cent of the airline, having sold 600,000 shares last week to send a “clear message” to directors about concerns over its strategy.

EasyJet Carolyn McCall said the carrier continued to “make good progress on its evaluation of the next generation of short-haul aircraft technology”.

She added: “The commercial evaluation and discussions are well underway. To allow the time necessary to achieve the optimal commercial outcome, EasyJet may consider converting options for three A320 aircraft under the terms of its existing framework agreement with Airbus.”