EasyJet targets another bumper summer of record profits

EasyJet targets another bumper summer of record profits

Unlock the Editor’s Digest for free

EasyJet is targeting a second consecutive summer of record profits as it said the deepening conflict in the Middle East was not deterring customers from booking holidays.

The low-cost airline said bookings for the northern hemisphere summer “continue to build well” in an update on Thursday, while ticket prices were at present tracking higher than last year.

“We move into the summer period with confidence we can deliver another record summer performance,” easyJet’s chief executive Johan Lundgren said on Thursday. His comments come after the airline swung back to profit last year following a post-pandemic travel boom.

Lundgren cautioned that the airline had not made any formal forecasts for the summer, but that revenue per seat, an important industry metric, was higher than a year ago. The airline made record pre-tax profits of £866mn for the six months between April and September last year.

EasyJet said it had also not seen any hit to consumer confidence from the Iranian missile strike on Israel in the early hours of Sunday, which has raised fears of a regional conflict in the Middle East.

“We are looking at this on a daily basis, and there was no impact on bookings,” Lundgren said.

In contrast, the start of regional tensions in October last year cost it £40mn, as the airline cancelled flights to Tel Aviv and Jordan, while easyJet estimated it lost a further £40mn from a wider slowdown in bookings across Europe for about six weeks in the final quarter of last year. The airline had suspended flights to Israel over the summer, it said, and redeployed the limited capacity elsewhere in its network.

Despite that hit, the airline on Thursday forecast pre-tax losses of between £340mn and £360mn for the six months ending in March, better than analysts had predicted and down from losses of £411mn a year earlier.

The company is expecting to report a 22 per cent rise in revenue over the period when it publishes first-half earnings next month, to about £3.3bn, in part driven by a strong performance from the group’s package holiday arm.

Shares rose 2 per cent in morning trading on Thursday, taking gains for the year to just over 5 per cent.

Unlike its two big low-cost rivals, easyJet’s supply of new aircraft has not been hit by supply chain problems.

Ryanair has been forced to slightly dial down its summer plans amid large delivery delays from crisis-hit Boeing, while Wizz Air has been badly hit by problems with the Pratt & Whitney engines on its Airbus fleet.

EasyJet flies an all-Airbus fleet with CFM engines and expects to receive its aircraft on time over the rest of the year.

“We are actually getting some a little earlier — we don’t have any issues,” Lundgren said.