easyJet flying higher than expected

Airline easyJet interim losses were lower than expected, helped by a increased revenues and tight control of costs.

Loss before tax for the six months to the end of March narrowed year-on-year from £153m to £112m, while revenues rose 15.7% from £1,266m to £1,465m. Loss per share decreased from 26.6p to 21.2p. The pre-tax margin improved by 4.5 percentage points to 7.6%.

Total revenue per seat grew by 11.9% to £50.47, and by 11.2% on a constant currency basis, driven by a combination of tighter market capacity, improvements in revenue management, web site initiatives and the 'europe by easyJet' marketing campaign. The seats-flown metric grew by 3.5% and the average load factor improved by 1.5 percentage points to 86.9%.

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Carolyn McCall, easyJet Chief Executive said: "In the first six months of the year easyJet has continued to deliver improvements in customer satisfaction, operational, and financial performance. We have also returned £196m to our shareholders.

"The economic environment remains uncertain, and the aviation industry faces headwinds such as the recent increase in UK APD [air passenger duty]. However, easyJet's strategy of low fares and our focus on making it easy for our customers, aligned with tight cost management and strictly managed allocation of capital, ensures that easyJet is well positioned to deliver good results for shareholders."

Passengers flown grew by 5.4% to 25.2m, while easyJet continued to grow its share of the short-haul business travel market.

Total cost per seat excluding fuel grew by 2.1% to £37.70, and by 1.5% on a constant currency basis as the airline benefited from the exceptionally low levels of disruption in the period, resulting in a £15m reduction in disruption costs.

In the UK, easyJet increased underlying capacity by 2.2%, while reallocation of assets within the UK delivered strong improvements in unit revenue as easyJet grew underlying capacity in London by 1.8% and by 2.3% in the regions. In France the company has further increased its presence by opening two new regional bases at Nice and Toulouse.

"The business traveller strategy is progressing well in France with deals now signed with the largest travel management companies in the main regions. There is increased penetration of business passengers and strong revenue per seat growth on key business routes," the firm added.

Operations have also continued well in Italy, Germany and Switzerland but the group said it is disappointed that the Spanish government has announced significant increases in airport charges at the country's AENA network of airports and believes that these will "undermine efforts to grow Spain's economy".

Cash at the the end of the period fell to £42m from £226m at the start, following the payment of both a special and ordinary dividend. No interim dividend will be paid.

The share price rose 3.05% to 524.50p by 08:33.

NR