- EasyJet CFO Kenton Jarvis to become CEO
- Jarvis joined EasyJet in February 2021
- Outgoing CEO Johan Lundgren to leave early 2025
Shares in EasyJet (EZJ) were down more than 5% to 498p as investors reacted to the announcement that the low-budget airline’s CEO Johan Lundgren is stepping down after seven years in the role.
Kenton Jarvis, board member and chief financial officer will takeover from Lundgren as CEO.
Jarvis joined EasyJet in February 2021 and will continue in his current role during the succession period. The company said the search for his successor will commence shortly.
Separately EasyJet reported a positive set results with a 22% increase in total revenue to £3.26 billion and a 17% increase in passenger revenue to £2.04 billion for the six months ending 31 March 2024.
STRONG EARNINGS GROWTH
The low-budget airline believes it is well positioned to deliver strong earnings growth year-on-year due to positive summer demand, strong EasyJet holidays profit growth and the £61 million reduction in winter losses.
EasyJet saw a 12% increase in capacity to 42.3 million seats for the first half of 2024 compared to 37.9 million seats in the same year ago period.
The number of passengers increased 11% to 36.7 million for the first half of 2024 compared to 33.1 million in the same year ago period.
EasyJet said it was ‘on track’ to deliver their ambitious medium-term target of over £1 billion pre-tax profit.
The company continues to expand its network in the UK and Europe with the launch of bases in Birmingham, Southend – its 10th UK base in 2025 and Alicante.
EasyJet holidays has benefited from the Birmingham base launch with 15% of all departing airline seats being EasyJet holidays’ customers.
EXPERT VIEW
Russ Mould, investment director at AJ Bell said: ‘EasyJet cannot win over the market despite bouncing back from the pandemic and riding the boom in the travel sector.
‘The airline’s shares have taken another lurch downwards on the latest results and news that chief executive Johan Lundgren is stepping down next year. He is being replaced by finance boss Kenton Jarvis, which suggests a smooth passing of the baton and no change to corporate strategy.
‘The negative share price reaction implies that the market doesn’t approve of the appointment and that investors wanted an outsider to come in and shake things up.
‘One of the key goals for airlines is to make sure planes are as full as possible each flight. EasyJet expects its planes to be fuller this summer and says it is on track to hit a medium-term target of more than £1 billion pre-tax profit. Normally such news would be reassuring, but it’s just not enough to please the market.’
DISCLAIMER: Financial services company AJ Bell referenced in this article owns Shares magazine. The author of this article (Sabuhi Gard) and the editor (Martin Gamble) own shares in AJ Bell.
