EasyJet sees no sign of demand softening as profits increase
The low-cost carrier posted headline pretax profit of £236m for the three months ended June 30, from £203m reported a year earlier.
Low-cost airline easyJet has said it does not see any signs of softening demand, with fares holding as its latest financial results and upbeat outlook sent shares up 8%.
This is in stark contrast to rival airline Ryanair, which said earlier this week it would cut fares over the coming months in order to stimulate demand as profits in its most recent quarter fell 46% to €360m. This sent chills across the European airline industry, deepening fears of a weak summer.
According to easyJet’s results for the period April to June, profit increased by 16% compared to last year, with the company saying it was on track for a record summer.
Shares in the airline rose 8% during early trading on Wednesday.
Chief executive of easyJet Johan Lundgren said on average the “fare environment is very similar to what we saw last year”.
Mr Lundgren said it was difficult to comment on the comparisons with Ryanair since easyJet operates head-to-head with the Irish airline on only 20% of its network.
"Given the Ryanair commentary this week on a large weakening in demand and pricing, the outlook for peak summer [from easyJet] appears to be 'ok' given the market has been expecting the worst," JPMorgan analysts said in a note.
Expectations for pricing to hold up in the peak summer quarter were reassuring, they said.
EasyJet’s revenue per seat for the quarter was up 1% and the trend is expected to continue into the coming months, easyJet said, with final quarter bookings 69% sold.
The London-listed airline lifted its profit forecast for easyJet holidays to more than £180m (€214m) in the full year from a previous expectation of £170m.
EasyJet said it was a step closer to achieving its medium-term targets.
Mr Lundgren, whose plans to leave the airline next year sent easyJet stock tumbling in May, has focused on cutting debt and restoring revenues after the pandemic. He launched easyJet holidays in 2019 to boost spending with the airline.
The low-cost carrier posted headline pretax profit of £236m for the three months ended June 30, from £203m reported a year earlier.
