EasyJet soars on revenue boost

EasyJet soars on revenue boost

Shares in EasyJet soared after a quarterly revenue rise showed the British budget airline had benefited as rivals struggled, in its first trading update under new boss Johan Lundgren.

The European airline industry was reshaped last year after British holiday carrier Monarch collapsed, Germany’s Air Berlin and Italy’s Alitalia went into administration and Europe’s biggest budget airline Ryanair scrapped flights due to pilot rostering issues.

That reduction in capacity has helped EasyJet, supporting prices and load factors on its flights. It also swept up part of Air Berlin’s operations at Berlin Tegel airport. The first Tegel flight by EasyJet was this month.

“Clearly there’s been less competitive pressure on certain routes,” Mr Lundgren, who joined in December, said, citing Monarch, Ryanair, Air Berlin and Alitalia as factors.

“We’re always seeing the impact of what’s happening in the competitive landscape, and it has been to our advantage this time,” he said.

Shares in EasyJet, Europe’s second largest no-frills carrier, rose by as much as 6.3% after first quarter results, hitting a two-year high.

The airline said total revenue increased 14.4% to £1.14bn (€1.3bn) in the three months to the end of December, helped by lower growth from rivals in its markets and positive foreign exchange effects.

Other airlines also saw strong share growth, with Ryanair up by nearly 1.8% and IAG ahead by almost 1.5%.

This was despite Ryanair and the Aer Lingus and British Airways owner losing out in the bidding race for insolvent budget carrier Niki to its founder and previous owner, former motor racing champion Niki Lauda.

Travel group Thomas Cook has said it is likely to buy seats on Niki after it was bought back by its founder.

“As a holiday company we are likely to buy seat capacity for our customers from Laudamotion, as we did with Niki and Air Berlin in the past,” a spokesman for Thomas Cook said, referring to a company controlled by Mr Lauda.

The previously agreed sale of Niki to IAG fell through after two courts ruled the insolvency proceedings had to move to Austria from Germany.

That cleared the way for other parties, such as Ryanair and Mr Lauda, to again bid for the carrier.

Mr Lauda said he plans to scrap the Niki brand name and integrate the carrier into his Laudamotion business.

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