Benign competitive environment sees increase in profits at easyJet

Benign competitive environment sees increase in profits at easyJet

easyJet has delivered a strong performance in the third quarter, with total revenue increasing by 14 per cent to £1.6 billion and ancillary revenue up by 21.1 per cent to £328 million.

For the three months to June 30th, passenger numbers increased by 9.3 per cent to 24.4 million, driven by an increase in capacity of 8.9 per cent to 26.2 million seats.

The latter figure was, however, lower than originally planned due to disruption.

Load factors increased by 0.3 percentage points to 93.4 per cent.

Disruption across Europe continues to be an industry wide issue and is having an impact on revenue, cost and operational performance, easyJet said, with the main drivers being European industrial action and air traffic restrictions.

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Despite this increase in disruption, the carrier increased its headline profit before tax guidance for 2018 to between £550 million and £590 million.

This compares to the £408 million it made in 2017 and represents an upgrade from the £530 million to the £580 million it forecast in May.

Johan Lundgren, easyJet chief executive, said: “easyJet has delivered a strong performance during our third quarter driven by robust customer demand.

“The airline continues to go from strength to strength attracting more than 24 million customers in the period who chose to fly with us for our leading network of top European destinations, low fares and outstanding service.

“We have also seen the continued growth in ancillary revenues, mainly due to more passengers choosing to buy allocated seating and hold bags.”

easyJet said it had benefited from the collapse of Monarch and airberlin, while strikes at Air France had also boosted results.

easyJet now expects half two revenue per seat at constant currency to increase by low to mid-single digits.

Current data shows that uptake by competitors of overlapping Monarch capacity continues to be lower than expected into quarter for, however, some impact on late yields may be expected from continued warm weather.