EasyJet: ‘Slight improvement’ in airline's half-year financial results
EasyJet said it has continued to see strong demand for flights and holidays as it reported a headline pre-tax loss of £394m for the six months to the end of March.
This figure compares with losses of £350m a year ago, but represents a “slight improvement” of about £50m when the later timing of Easter this year is taken into account, the airline company said.
Seasonal demand for air travel means airlines often record losses in the winter followed by profits in the summer.
EasyJet said the number of passengers it carried in the first three months of the year was 18.2 million, up 8 per cent compared with a year ago.
Its package holiday arm recorded pre-tax profits of £44m for the six months to March 31, which is a 42 per cent increase year-on-year.
EasyJet chief executive Kenton Jarvis said the company was attracting more customers through its “great fares, friendly service and unrivalled network of destinations”.
“We are executing well against our strategy, to drive efficiency and enhance our customer experience both in the sky and on the ground.
“In addition, our commitment to giving customers an even greater choice of flights and holidays will also see us continuing to grow both in Europe and the UK, where we will be launching a new base in Newcastle from next spring.
“We remain focused on delivering another record summer this year, expecting to drive strong earnings growth as we continue to progress towards our target of sustainably generating over £1 billion of annual profit before tax.”
Richard Hunter, Head of Markets at interactive investor, commented: “Despite having posted its usual and expected winter loss, easyJet has on closer inspection made the sort of progress which should ensure another year of growing profitability.
"The group will be hoping for a repeat of last year, where the second half performance including the peak summer season, resulted in record pre-tax profit.
"The outlook comments provide some grounds for optimism on that front, with the third and fourth quarters already being 80 per cent and 42 per cent sold respectively, which gives some clear visibility of earnings.
"easyJet is maintaining its full-year outlook of pre-tax profit of £703m, en route to its stated medium-term aim of £1bn of pre-tax profit.”
He added: “Inevitably the sector is one which is notoriously difficult on any number of fronts and the cool share price reaction to the update reflects some disappointment on the headline loss figure, where the pre-summer holding pattern is evident.
"There have also been a host of external factors outside of the industry’s control traditionally, which have made the airline industry a difficult investment destination.
"These have ranged over the years from the possibility of strike actions to conflicts and volcanic ash clouds, let alone the major shock which the pandemic brought.
"Indeed, the easyJet share price remains some 55 per cent shy of pre-pandemic levels, indicating how much damage can be done by events and how difficult the recovery path can be.”