EasyJet reports pre-tax winter loss of £24 million

EasyJet reports pre-tax winter loss of £24 million

EasyJet today confirmed a winter pre-tax loss of £24 million due to the impact of terrorist attacks, despite a rise in passenger carryings. 

The budget airline disclosed that strong October trading was blown off course by the impact from “external shocks to demand from terrorism events related to Sharm el-Sheikh, Paris and Brussels”.     

EasyJet saw the benefits of continued investment in digital, business and revenue initiatives as offsetting the impact of cancelling flights to Sharm el-Sheikh from November 4 following the downing of a Russian passenger aircraft and a drop in demand after the Paris attacks. 

The carrier’s trading for the half year to March 31 saw carryings rise by 7.4% to 31 million and revenue up by 0.3% to £1.77 billion.

However, a pre-tax profit of £7 million achieved in the previous winter turned into a loss. Chief executive, Carolyn McCall, described the half-year financial results as “robust” in the face of “well-publicised external events”.

She said: "Underlying consumer demand has been strong with UK beach traffic providing a healthy start to the half and easyJet's biggest-ever ski season helping to deliver increased passenger numbers and higher revenue during the first half.

"Consumers have enjoyed lower fares, which have decreased by 6% year-on-year, the second successive year of falling fares, as the benefits of lower fuel costs are passed on to passengers. Active cost control by the airline has helped maintain margins.

"This performance is a clear demonstration of the strengths of easyJet's unique combination of Europe's leading network coupled with friendly service, low fares, and digital and data leadership.

"We are confident that over the full year we will again grow passenger numbers, revenue and profit.”

The annual dividend payout ratio will increase by a quarter to 50% subject to AGM approval, she added. Revenue per seat in the six months to March 31 slid by 6.6% to £51.29 and the load factor was flat at 89.7% year-on-year.

However, easyJet benefitted from the early timing of Easter this year and a strong finish to the ski season. In-flight revenue was up by 34% and fuel costs dropped by £50 million.

The number of higher yielding business passengers rose by 6% in the period with sale of dedicated business fares rising by 10% year-on-year. New three-year distribution deals were signed with Sabre and Travelport to help drive GDS sales and 58 new business travel deals were signed by an increased corporate sales teams.

The airline also cited increased passenger loyalty with 74% of seats booked by returning customers in the year to March – up by six percentage points on the previous year.

Mobile revenue grew by 30% year-on-year and conversion rates on easyJet.com are increasing “significantly” due to on-going optimisation. The airline’s app has been downloaded 15.9 million times and as it becomes more established it is driving increasing contribution to revenue, easyJet said.

“EasyJet's commitment to innovation and digital leadership continues: adding Apple Pay capability that enables customers to pay using just their thumbprint; pre-pay vouchers for inflight purchases; and increasing amounts of digital self-service capability such as our disruption portal and mobile host rollout, which is now available at 14 airports,” the airline said.

“EasyJet is constantly looking to examine and develop new revenue streams, with a recent example being the successful launch of the easyJet Holidays website in 2015. 

“Some potential opportunities include exploring new distribution channels, partner agreements and structures such as connectivity with other airlines and easyJet will update on developments at the full-year results.”

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