Ryanair rival EasyJet posts record pre-tax profit and says it is prepared to change routes if heatwaves change holiday habits

EasyJet is prepared to change its routes if heatwaves change holiday habits in the years to come, the airline's chief executive Johan Lundgren said.

EasyJet ticket yields soared 22% year-on-year.

Ryanair rival EasyJet posted a record pre-tax profit of £203m €233m) for its third quarter, above analysts' forecasts, on the back of an ongoing rebound in summer travel demand and limited disruption despite ongoing strikes.

Airlines in Europe are set to report strong earnings this quarter as post-pandemic travel demand continues to drive bookings across the continent at similar levels to 2019, with growth projected to continue into the winter.

The British budget airline said it also expected to report record pre-tax profit for its fourth quarter as costs per seat flattened with oil prices stabilising. However, EasyJet's CEO Johan Lundgren warned about the potential impact of limited airspace availability and air traffic control strikes in Europe.

Mr Lundgren said the airline is prepared to change its routes if heatwaves change holiday habits in the years to come.

A report by the European Travel Commission showed that tourists were taking more of an interest in travelling to more northern locales to dodge heatwaves and were booking fewer holidays to the Mediterranean in the peak summer months.

Mr Lundgren said the airline had the flexibility to change routes based on demand, even from one year to another. "So, I don't assume that this is going to be a big issue for us," he continued.

This summer's record temperatures hadn't impacted EasyJet's customers so far, he added, and hadn't deterred travellers from going to their usual sunny holiday spots.

The fast-growing holiday business is on track to become one of the biggest players in Europe and is targeting French and German markets for the next stage of expansion, the company said.

Former TUI executive Garry Wilson was hired in 2018 by Mr Lundgren, his former boss at TUI, to head a digitally-focused holiday business that launched the following year, replacing the airline's smaller and mainly outsourced holiday unit.

As travel demand has bounced back after the pandemic, EasyJet holidays is set to boost group profits by more than £100m this financial year, which Mr Wilson said was just the beginning.

"There's a huge amount of growth we can still have," he said in an interview, noting the airline has 93 million seats per year and customers with holidays as well as flights only account for 4% of those.

EasyJet holidays serves only UK customers, competing with Jet2, TUI and others to sell Mediterranean beach and city break packages, but it will launch over the coming weeks in Switzerland, a market which Mr Wilson called "a gateway". "France and Germany will then follow probably quite quickly," he said.

- Reuters