easyJet to beat first half predictions

Low cost airline easyJet said its financial performance in the first half of the year would exceed guidance it gave in January.

The company said improvements in revenue management combined with marketing and website initiatives had enabled easyJet to take advantage of weaker competitors leaving the market.

As a result, the board expects a pre-tax loss for the six months to the end of March of between £110m and £120m compared with the previous expectation of a pre-tax loss of £140m to £160m.

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This improved performance comes despite a £100m increase in the first half fuel bill.

The rise in total revenue per seat at constant currency for the first half of the year will be better than expected at a little over 10%, the company said.

Around half of the improvement in total revenue per seat was driven by actions taken last year on ancillary pricing, it added.

easyJet also said it had been helped by the good weather, which contributed to an unusually low level of cancelled flights.

This meant disruption and de-icing costs dropped by £18m compared to the same period last year, the airline said.

However, the airline said it continued to expect the environment for airlines to remain difficult.

While it took advantage of failing competitors in the last six months, it will will faced increased competition going forward with other firms, including Iberia, looking launching low cost alternatives.