Hard-pressed businesses help EasyJet narrow losses

EasyJet yesterday reported a smaller-than-expected winter loss, helped by tough cost controls and a record number of business passengers.
EasyJet's chief executive Carolyn McCall. Picture: Jane BarlowEasyJet's chief executive Carolyn McCall. Picture: Jane Barlow
EasyJet's chief executive Carolyn McCall. Picture: Jane Barlow

Some analysts expressed disappointment that the budget carrier did not further upgrade its financial forecasts, though City reaction was generally upbeat about an airline which has stolen a march on arch-rival Ryanair by introducing allocated seating and allowing passengers to change flights in a bid to appeal to the business market.

The Luton-based group reported a total of 27.6 million passengers in the six months to the end of March, a rise of 4 per cent, as revenues lifted 6.3 per cent to £1.7 billion and losses fell to £53 million. This was narrower than last year’s £61m deficit and ahead of upgraded guidance given to the City in April.

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It said it flew a record 12 million business passengers in the year to March, a rise of 44 percent on when it first began to target the market in 2010, when it carried 8.4 million business travellers.

Chief executive Carolyn McCall, pictured, said: “Recession and austerity has also encouraged business passengers across Europe to sample EasyJet and when they do so they like the experience.”

The airline stressed that over the past six months it had managed to cut costs, boost margins and increase capacity.

It said its total revenue per seat – a key industry measure – rose 1.5 per cent to £54.80, while it expanded its capacity by 3.6 per cent to 31.1 million seats. The load factor – a measure of how full its planes are – nudged up 0.4 per cent to 89 per cent.

The firm expects to have a busy summer, when it carries more holidaymakers and traditionally makes its profits. It is anticipating a 3 per cent increase in flight capacity by competitors this summer and has warned that the World Cup in Brazil, meant forecasting passenger behaviour was difficult.

McCall added: “There continues to be a number of attractive opportunities for EasyJet to grow profitably in Europe and we look forward to making further progress in the second half of the year.”

Shares slipped 4.2 per cent or 72p to close at 1,658p, with Hargreaves Lansdown analyst Richard Hunter noting that the “weight of expectation for EasyJet is, unsurprisingly, increasing”.

He added: “The shares may be subject to some shorter term profit taking, although the market consensus of the shares as a ‘buy’ remains firmly intact.”

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Irish rival Ryanair has stepped up its efforts to attract business travellers, saying in March it was in talks about flying to more convenient airports, having brought in allocated seating.

• Total airline spend rose by 8.5 per cent in the year to March as stronger industry competition led to lower ticket prices, according to a survey by Barclaycard, which claims to process nearly half of all the UK’s debit and credit card transactions.