Losses narrow for easyJet

Low-cost airline easyJet said it had narrowed half-year losses to £17m (€25m), a day after shocking investors with a warning regarding fares pressure.

The Luton-based group's half-year results showed a 14% increase in revenues to £719m (€1bn), helped by an 11% rise in passenger numbers to 16.4 million. Losses in the seasonally quieter period were down 58% from £40m (€58.8m).

But the results for the six months to the end of March were overshadowed by guidance issued on Tuesday, when easyJet said it was still seeing pressure on fare levels in the summer months due to continued strong competition.

Shares closed 7% lower as a result, even though it said annual pre-tax profits were still likely to meet previous guidance for growth of between 40% and 50%.

EasyJet's better half-year performance reflected a fall in costs when excluding fuel, with the figure down by 2.1%, or 57p a seat, to £27.18. The company's fuel bill was largely flat on a year earlier, although easyJet said this measure should be lower by the end of the full year.

Revenues per seat also improved, with the contribution from areas such as insurance and car hire improving by 18% to £3.81 (€5.60) a seat.

EasyJet said the continued focus on its cost base meant it had been able to enter the second half of the year with increased promotional activity and boost passenger levels during weaker market conditions.

However, chief executive Andrew Harrison repeated his earlier warning that tough comparatives with a year ago and continued competition would put pressure on revenues per seat during the summer.

On Tuesday, it emerged the airline filled 83.1% of its seats in April, compared with 86.4% a year earlier.

EasyJet made more than 130,000 flights during the six month period, which it said left it the fourth largest airline in Europe. The fleet grew to 127 aircraft, comprising 97 Airbus 319s and 30 Boeing 737-700s.