On Tuesday, the British budget carrier announced that it is likely to surpass market expectations for full-year pre-tax profits of £260 million for the 12 months ending in September. This forecast is more than double its previous guidance in January, which projected over £126 million in pre-tax profits. EasyJet's shares increased by over 1% on Tuesday afternoon.
Airlines throughout Europe have experienced consistent strong bookings this year, a trend that easyJet CEO Johan Lundgren attributed to consumers prioritizing travel spending. The industry's recovery has been further reinforced by passengers' willingness to pay higher ticket prices, which are partially due to airlines passing on increased costs, such as fuel.
EasyJet reported "strong" pricing during the winter, with revenue per passenger seat increasing 40% to £66.46 between October and March. This increase includes higher ancillary revenues, such as fees for carry-on or checked luggage. The airline anticipates this trend to persist into the summer, with revenue per seat projected to grow around 20% YoY during the April-June quarter.
Lundgren explained that covering the costs of inflation pressure and rising fuel prices is necessary. Analysts at Goodbody noted that these "very strong pricing trends" have led to improved earnings guidance for easyJet, and they expect investors to reevaluate the strength of the summer season positively for both easyJet and the industry.
Between January and March, easyJet expanded its flight schedules by 40% and plans to reach approximately pre-pandemic capacity levels during the summer. This growth strategy is similar to British Airways' but falls short of Ryanair, which is already operating above its 2019 capacity.
Despite French air traffic control strikes, easyJet reported "robust" operations over Easter. Industry executives hope this smooth performance will alleviate concerns about a repeat of last year's travel disruptions caused by staff shortages across the sector.
EasyJet reduced its pre-tax losses for the six months ending in March to £415 million from £545 million a year earlier. During this period, revenue increased by 80% to £2.7 billion, while fuel costs more than doubled to £770 million.
