EasyJet raises earnings target again as bookings remain strong

EasyJet Plc raised its earnings target for a second time this year amid strong bookings into the crucial summer period and robust demand during the Easter vacation. 

The discount specialist now expects to beat revised market expectations that foresee a pretax profit of £260 million this year, according to a statement today. That’s up from a previous goal of beating pretax profit expectations of £126 million. 

Revenue per seat for the fiscal third quarter will rise about 20%, EasyJet said following what the company called “robust’ sales during the Easter period when it operated about 1,600 flights a day at almost full capacity. The carrier expects almost full pre-pandemic capacity during peak the summer period, with about 1,900 daily flights.

“Despite the increased cost of living, holiday budgets remain unchanged with travel being the only discretionary expense people are prepared to maintain or increase,” Chief Executive Officer Johan Lundgren said on a media call. “This underlines the importance of travel to consumers.”

The shares rose as much as 4.2% to 532.6 pence. The stock has gained about 62% this year, the best performer on the Bloomberg World Airlines Index of 29 members in the period. 

The CEO said that about 60% of capacity had been booked for the fiscal third quarter, and more 30% of fourth quarter, slightly higher than at the same time last year, and a “couple of percentage” points below 2019. Beach and leisure destinations in Spain and Portugal were the most popular, he said. 

Fares stand to be higher than they were in 2019 because costs have increased, Lundgren said. Airlines have cautioned that ticket prices are increasing amid higher demand as well as increased costs on everything from fuel to staffing to efforts to decarbonise the industry.

Discount carriers including  EasyJet and bigger rival Ryanair Holdings Plc are benefiting from a combination of rebounding demand for summer travel alongside travelers trading down during the cost-of-living squeeze. Air travel in Europe has soared and carriers are looking to repair balance sheets wreaked by the pandemic and ensuing travel restrictions.  

EasyJet said in January that it expects to beat market expectation for a full year pretax profit, and said that its loss in the first half would be significantly better than in the same period a year earlier.