According to the companies Q3 statistics easyJet remains on track to deliver full year profit growth of 40%-50%, helped particularly by non- UK markets.Commenting on easyJet’s third quarter performance, the company’s Chief Executive Andy Harrison said:
“A strong increase in passenger numbers to almost 10m and continued high load factors in the third quarter reflect the strength of easyJet’s business model, based on low fares with care and convenience.
“Our future success is underpinned by our commitment to offering our customers the lowest fares to Europe’s most popular and convenient airports. These results provide further support to our maintained profit guidance for the full year”
easyJet continued to expand in its non-UK markets in the period, with the addition of six routes to its Milan base and the addition of three new countries to the network; Austria, Belgium and Romania. The airline now serves 318 routes to 83 airports in 22 countries and has become the second largest carrier in Portugal.
The impact of reduced lead in fares, increased promotional activity and the doubling of Air Passenger Duty in the UK has resulted in a fall in total revenue per seat of 8% compared to the same quarter last year. Rapid growth outside the UK means 46% of easyJet’s revenues are now in currencies other than GBP and at constant exchange rates, unit revenues were down 7% per seat or 5% per passenger.
Offsetting the impact of foreign exchange rates on revenues, the strength of Sterling has had a positive impact on costs with 35% of our costs in US Dollars, 26% Euros and 8% Swiss Francs. Continued investment in a modern, low cost fleet and on-going improvements in efficiency have resulted in unit costs, excluding fuel, being down in excess of 10% compared to the same period last year.
easyJet’s ancillary offering remains strong and the company continues to innovate in this area. In the quarter, the company launched easyJetHolidays, which will enable its customers to save time, money and effort while offering totally flexible holidays to suit the traveller’s individual needs. easyJetHolidays offers access to over 900 daily flights and a choice of 10,000 hotels and apartments, underpinned by a price promise guarantee.
On 2nd August easyJet become the first major European airline to offer its customers the opportunity to offset the carbon emissions of their flights by investing exclusively in United Nations-certified projects.
Today, easyJet also announced its July traffic statistics with strong load factors of over 88%, which reflect the success of the company’s pricing strategy. The company expects to maintain high load factors for the summer, while 2nd half guidance on revenue per seat remains unchanged, down 5% - 10%.
easyJet continues to make good progress on costs, evidenced by the recently announced $1 billion, 10 year engine maintenance and overhaul deal and continued improvements in operating efficiency. As a result, fourth quarter unit cost reductions, excluding fuel, will continue at a similar rate to the third quarter and better than previously expected. For the full year, the company’s total unit fuel costs will be slightly down versus last year.
easyJet’s full year guidance remains unchanged, for the year to September 2007 the company expects pre-tax profit growth of 40% to 50%.