EasyJet forecasts improved annual profits

EasyJet forecasts improved annual profits

EasyJet expects to overcome turbulence to exceed last year’s annual profit of £581 million.

Pre-tax profits are projected to go up to between £620 million and £660 million for the 12 months to September.

The improved result is forecast despite an uncertain macro and operational environment “caused by the situation in Greece and the events in North Africa, combined with the reduction in capacity at [Rome] Fiumicino as a result of the fire at the airport and the various threats of industrial action,” the budget airline said.

Figures will be boosted by falling oil prices, which is likely to cut the carrier’s annual jet fuel bill by as much as £115 million over the last financial year.

However, adverse exchange rates will have a £50 million impact in the current year.

Strike action by French Air traffic controllers and the fire at Fiumicino together caused 1,364 of the 1,463 flights cancelled in the three months to June 30 compared to a total of 648 flights grounded in the same period last year.

Revenue per seat was down 2.8% to £59.08 at constant currency in the airline’s third quarter, but better than guidance issued in May.

The performance was driven by trading in the UK and beach routes across Europe in May and June and successful implementation of “revenue management initiatives”.

This partly helped offset the impact of an early Easter and French ATC strikes in April which together decreased revenue per seat.

Quarterly revenue was down by 1% to £1.2 billion, capacity grew by 4.7% to 20.8 million seats, passengers carried increased by 6.2% to 19.1 million, and the load factor increased by 1.3 percentage points to 91.7%.

Savings made through airport and ground handling initiatives came in at £7 million in the period, giving a total of £28 million in cost reductions in the year to date.

Chief executive Carolyn McCall said: "Our Q3 performance shows that easyJet's strategy continues to deliver, in particular with good performance in the UK and beach routes across Europe.

“With 77% of second half seats now booked, easyJet expects to grow profit before tax from £581 million for the year to 30 September 2014 to a range of £620 million to £660 million for the year to 30 September 2015.

“Our Q3 performance means that for the full year easyJet will grow revenue, profits and dividends."


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