- £40 million hit from Middle East conflict
- Customer growth up 48% in Q1
- Pre-tax loss narrows to £126 million
Shares in EasyJet (EZJ) climbed over 5% to 534p after the low-cost airline said its first quarter performance had improved year-on-year ‘with booking trends giving a positive outlook for the remainder of the financial year’.
Highlights for the quarter ended 31 December 2023 included the performance of easyJet holidays, which delivered a £30 million profit, as well as a 48% surge in customer numbers.
The Luton Airport-based airline also reported a year-on-year narrowing in headline pre-tax losses from £133 million to £126 million. EasyJet said ‘bookings for summer 2024 are building well with the turn of the year bookings period showing an increase in both volume and pricing compared to the same period last year.’
WHAT DID THE CEO SAY?
CEO Johan Lundgren commented: ‘We see positive booking momentum for summer 2024 with travel remaining a priority for consumers. Flight and holidays bookings took off strongly during the traditional busy turn of year sales period, as customers opted to secure their summer holidays to firm favourites like Spain and Portugal alongside destinations further afield like Greece and Turkey.
‘EasyJet remains focused on delivering for our customers in the coming months, while also expecting to deliver continuing performance gains.’
Neil Shah, executive director of content and strategy at Edison said: ‘Since late November, there's been a significant recovery in demand and bookings.
‘Looking forward, easyJet anticipates disciplined capacity growth of about 9% in the 2024 financial year, underpinning a positive outlook for the summer season and the remainder of the financial year.’
REDUCED LOSSES
Budget airline EasyJet expects its first half loss to reduce year-on-year despite taking a £40 million direct hit from the conflict in the Middle East, which started on 7 October, due to a pause in flights to Israel and Jordan that remains in place.
Russ Mould, investment director at AJ Bell, commented: ‘It seems consumers still have the capacity and the will to prioritise spending on their holidays. The urge to jet away is understandable after a period during the pandemic when people were prevented from doing so.
‘How far this can and will run is a big question for all travel-related businesses who, for the time being, have seen people prepared to stomach a significant increase in the cost of a break relative to pre-Covid times.’
EasyJet’s performance is in stark contrast to controversial low-cost airline rival Ryanair (RYAAY:NASDAQ), which recently launched its first partnership with an online travel agent Loveholidays despite repeatedly branding such companies as ‘pirates’.
DISCLAIMER: Financial services company AJ Bell referenced in this article owns Shares magazine. The author of this article (Sabuhi Gard) and the editor (James Crux) own shares in AJ Bell.
