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EasyJet losses narrow as revenue tops £2bn for first time
Losses at budget airline EasyJet narrowed in the first half as revenues surged nearly 20% to over £2bn for the first time, with the company benefiting from the collapse of Monarch and Air Berlin and troubles at Ryanair.
In the six months to the end of March, pre-tax losses came in at £68m versus £236m in the same period a year ago, as revenue jumped to £2.2bn from £1.8bn. The losses are mostly due to costs incurred to expand operations at Berlin's Tegel airport, which it picked up from Air Berlin at the end of last year.
Total revenue per seat increased by 10.9% to £54.10, or 8.3% at constant currency, and passenger numbers for the six-month period were up by 3m to 36.8m, including 0.7m from the new Tegel operations.
Headline pre-tax profit excluding Tegel came in at £8m, which is a £220m improvement on the first half of last year, and the company said it expects headline pre-tax profit for the year to the end of September 2018, including the loss from Tegel, to be between £530m and £580m.
EasyJet highlighted a strong performance on ancillary revenue per seat, which rose 14% at constant currency. Ancillary revenue includes revenue from the provision of checked baggage, allocated seating and change fees. It also includes non-seat revenue arising from commissions earned from services sold on behalf of partners and inflight sales.
The company also announced a series of new appointments, with Garry Wilson set to be the head of easyJet Holidays and Luca Zuccoli joining as chief data officer to lead and coordinate the management of data across the airline.
In addition, Flic Howard-Allen has been appointed to the position of group communications director to replace Paul Moore, while Ella Bennett will become group people director, taking over from Jo Ferris. Lis Blair has been promoted to chief marketing officer, a role that was created in the airline's restructure in January and Thomas Haagensen has been appointed to the newly created role of group markets director.
Chief executive Johan Lundgren said: "Our performance was helped by the reductions in capacity from other airlines but was also driven by the strength of the easyJet brand which is now the most considered airline brand in the UK), moving ahead of BA for the first time. We also reached the milestone of carrying 13m business travellers a year - partly supported by the increase in city to city routes as we successfully started operations in Berlin Tegel.
"Turning to our strategy, I have today announced an increase in investment in easyJet Holidays to gain a greater share of that market, showcased a series of initiatives to increase the number of passengers travelling on business and revealed plans to introduce a new loyalty programme which will support and reinforce all of these initiatives and will further increase passenger loyalty to easyJet. I also outlined new investments to harness the power of our data to improve our customer proposition, reduce costs and increase revenue. All of these initiatives will provide higher profit per seat and higher returns for our shareholders."
Neil Wilson, chief market analyst at Markets.com, said: "It's all going in the right direction for EasyJet and it remains the case that the company is well placed to benefit from further disruption in European short haul. With rising oil prices potentially pushing some into difficulty this year, further consolidation is anticipated."
At 0818 BST, the shares were up 2.9% to 1,733p.