EasyJet Airline Flies into Loss and Cautious on Outlook

7th May 2003

, the largest low-fare airline in Europe, on Wednesday made clear that fares remain under pressure for summer travel despite the growth in its traffic.

Caption: Ray Webster
Chief Executive - easyJet

EasyJet swung to loss of 46.9 million pounds loss ($73 million) in the six-month period ending in March. Revenue rose 92 percent to 373 million pounds, largely reflecting the impact of its acquisition of the rival Go airline.

Shares rose 2.8 percent in London to 193p; the stock hit its lowest level at 173.5p on Friday since the airline floated shares in 2000. Rival Ryanair Holdings (RYAAY: news, chart, profile) (UK:RYA: news, chart, profile) was down 0.3 percent.

EasyJet said its average fare declined 10.7 percent to 37.45 pounds. “The impact of external events, such as the conflict in Iraq, has placed further pressure on yields,” it said.


The airline`s pre-tax loss of 48.1 million pounds was largely in line with lowered expectations from analysts. In the year-ago period, EasyJet posted a pre-tax profit. Passenger numbers rose 40 percent to 9.3 million on a pro forma basis that factors in Go-EasyJet in the year-earlier period.

EasyJet said it was unable to forecast targets for the year with uncertainty over summer travel demand.

“Forward bookings indicate that revenue per flight in May is tracking close to last year, whereas June appears weaker, although a much lower proportion of June`s seats have currently been booked,” it said.

“At this point in time it is too early to have visibility regarding the financial outcome for the full year, as the strength of fares over our crucial summer period is not likely to be clear for a couple of months.”

The airline said it expects to maintain a high load factor with declining yields offset by capacity reductions in the second half of the year. “The trading environment is challenging, but the propensity for travel within Europe remains strong and the number of passengers flying with EasyJet continues to grow,” it said.



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