EasyJet losses narrowed by over £50million year-on-year over its winter trading period, amid strong booking levels and higher prices ahead of the summer season.
The airline told investors on Thursday it expects to post a headline loss before tax of £340million to £360million for the six months to 31 March, against losses of £411million a year earlier.
The result was achieved despite headwinds from fuel costs, which prompted per seat inflation of 5 per cent, and the conflict in the Middle East, which resulted in a direct impact of around £40million in its first half.
EasyJet has suspended flights to Tel Aviv for the remainder of the summer season until 27 October.
EasyJet said pricing was ‘very strong’ at the start of the period, with revenue per seat up 12 per cent year-on-year in October.
In charge: Johan Lundgren is the chief executive of EasyJet
The group said total passenger revenue per seat increased by 5 per cent from £66.46 to £69.87.
EasyJet’s ancillary revenue, which covers sales from extras like advance seat selection and food, is expected to come in at £910million for the period, representing a 19 per cent increase on the £767million posted last year.
Profits across its holidays arm reached around £31million in the period, up 206 per cent on the same point last year.
The airline said demand has bounced back since late November, with half-year figures also boosted by the start of the Easter holidays falling in March this year.
Between October and March, passengers numbers were up 8 per cent year-on-year, while average fares paid increased by 9 per cent.
Seasonal demand for air travel means airlines often record losses in the winter and profits in the summer.
Bookings for this summer ‘continue to build well’, EasyJet said, with ‘an increase in volume and pricing compared to the same period last year’.
The group expects revenue for the half-year to have increased by 22 per cent to £3.27billion.
Suspended: EasyJet has suspended flights to Tel Aviv for the remainder of the summer season
EasyJet shares rose 3.32 per cent or 17.20p to 535.40p on Thursday.
Johan Lundgren, chief executive of easyJet, said: ‘The importance that consumers place on travel coupled with easyJet’s trusted brand has driven good demand for our flights and holidays.
‘Our growth and focus on productivity have reduced winter losses by more than £50million.
‘We have further enhanced our network with the launch of new bases in Alicante and Birmingham providing greater choice for consumers across Europe.
‘We are well set up operationally for this summer season where we expect easyJet to be one of the fastest growing major airlines in Europe and take more customers on easyJet holidays than ever before.’
Richard Hunter, head of markets at Interactive Investor, said: ‘The share price has reflected the volatile swings which inevitably track the sector.
‘Over a five-year period, the shares are down by 49 per cent, during which time EasyJet saw both relegation from and promotion to the FTSE 100 in 2019.
‘The group was relegated again in June 2020 as the pandemic struck its blow, finally regaining its status in the premier index last month.
‘Of late, the performance has been equally turbulent, with a 33 per cent hike in the share price over the last six months just enough to lift the performance over the last year to an increase of 1 per cent, as compared to a dip of 0.8 per cent for the wider FTSE 100.
‘The initial reaction to the update is positive based on both immediate and medium-term prospects, which will in turn do little to trouble the current market consensus of the shares as a buy.’