Striking pilots at BA and Ryanair boost profits at easyJet

EasyJet operates more than 30 routes out of Liverpool John Lennon Airport and said pre-tax profits were likely to come in at £420m to £430m. Tony McDonough reports

easyJet, aircraft
EasyJet is expecting pre-tax profits of between £420m and £430m

 

Strike action at rivals British Airways and Ryanair will boost full-year profits at low-cost airline easyJet.

In a pre-close statement ahead of its full-year results announcement on November 19 easyJet, which operates eight aircraft and more than 30 routes out of Liverpool John Lennon Airport, said pre-tax profits would likely be between £420m and £430m.

Although at the higher end of analysts’ expectations, the figure for the 12 months to September 30 is down from last year’s pre-tax profit of £578m. The company also said headline cost for the full year will increase by around 12% due to increased capacity, higher unit fuel costs and adverse foreign exchange movements.

And with forwards bookings currently in line with the same time last year, easyJet’s expected capacity growth for full year 2020 will be “at the lower end of our historic range”.

Passenger numbers

In the last few months both BA and Ryanair have been dogged by strikes by their pilots, offering a boost to easyJet’s passenger numbers. Some analysts are also forecasting the comply will get a boost from the demise of tour operator Thomas Cook.

Passenger numbers for the full year increased by 8.6% to 96m, driven by an increase in capacity of 10.3% to 105m seats. Load factor (percentage of seats filled) for the full year will decrease by 1.4 percentage points to 91.5%.

And easyJet’s total fuel cost for the full year is expected to be around £1.42bn, which includes an adverse impact of foreign exchange and increased Emissions Trading System (ETS) costs.

Challenging conditions

Johan Lundgren, easyJet chief executive said:easyJet has continued to perform in line with expectations, despite challenging market conditions.

As a result of our self-help initiatives and the increased demand due to disruption at British Airways and Ryanair, we anticipate achieving headline profit before tax for the full year 2019 of between £420m and £430m, in the upper half of our previous guidance range.

Our implementation of initiatives in the fourth quarter to optimise yield has led to solid revenue performance with total revenue per seat at constant currency set to increase for the full year.

“We have continued to invest in operational resilience, with the programme successfully reducing the impact of disruption on our operations. As a result, we expect to report a fall in headline cost per seat for the year, excluding fuel at constant currency.

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