EasyJet boosts profit forecast as demand soars

EasyJet raised its profit forecast on the back of “strong” bookings and higher ticket prices, boosting the airline’s recovery from the pandemic as demand for travel booms despite the economic slowdown.

The UK airline on Tuesday said it expected to beat market expectations of a full-year profit before tax of £260mn for the 12 months to the end of September.

The forecast represents a significant improvement on easyJet’s guidance in January, which was for pre-tax profits to beat £126mn. Shares in the carrier rose more than 4 per cent in early trading.

Airlines across Europe have reported consistently strong bookings throughout the year, which easyJet chief executive Johan Lundgren put down to consumers “prioritising spending on travel”.

The industry’s recovery from the pandemic has been further boosted by passengers’ willingness to pay higher ticket prices. The rising prices are in part driven by airlines passing on increased costs, including fuel.

EasyJet said pricing was “strong” over the winter, with the revenue it makes from each passenger seat rising 40 per cent to £66.46 during the six months between October and March.

The rise included higher so-called ancillary revenues, such as customers paying extra to carry-on or check in luggage.

The airline expects the trend to continue into the summer, with revenue per seat forecast to rise around 20 per cent year on year during the April to June quarter.

Analysts at Goodbody said the “very strong pricing trends” had driven the airline’s improved earnings guidance, and said it expected investors to “again reappraise the strength of the summer season to the upside both for easyJet and the sector”.

EasyJet grew its flying schedules by 40 per cent between January and March, and expects to return to “around” pre-pandemic capacity levels over the summer.

Its growth plans are similar to those of British Airways, but well short of Ryanair, which is already above its 2019 capacity.

EasyJet reported “robust” operations over Easter despite the impact of French air traffic control strikes, and industry executives hope the smooth getaway will reassure passengers who fear a return of last year’s travel disruption, which was caused by industry-wide staff shortages.

EasyJet narrowed its losses over the six months to the end of March to £415mn from £545mn a year earlier. Revenue rose 80 per cent to £2.7bn, while fuel costs more than doubled to £770mn.