EasyJet boosts profit forecast as demand soars

EasyJet raised its full-year profit guidance on the back of strong bookings and higher ticket prices, boosting the airline’s recovery from the pandemic as demand for travel has defied the economic slowdown. The UK airline on Tuesday said it would probably beat market expectations of full-year pre-tax profits of GBP260m for the 12 months to the end of September. The forecast was more than double its previous guidance in January, of more than GBP126m in profits before tax. Shares in the carrier rose more than 1%t on Tuesday afternoon. Airlines across Europe have reported consistently strong bookings throughout the year, which easyJet chief executive Johan Lundgren put down to consumers “prioritising spending on travel”. The industry’s recovery from the pandemic has been further bolstered by passengers’ willingness to pay higher ticket prices. The rising prices are in part driven by airlines passing on increased costs, including fuel. EasyJet said pricing was “strong” over the winter, with the revenue it makes from each passenger seat rising 40% to GBP66.46 during the six months between October and March. The rise included higher so-called ancillary revenues, such as customers paying extra to carry-on or check-in luggage. The airline expects the trend to continue into the summer, with revenue per seat forecast to rise about 20% year on year during the April to June quarter. The metric reflects both ticket prices and how full planes are. “We have to cover the costs of inflation pressure and fuel we are seeing,” Lundgren said. Analysts at Goodbody said the “very strong pricing trends” had driven the airline’s improved earnings guidance, and said they expected investors to “again reappraise the strength of the summer season to the upside both for easyJet and the sector”. EasyJet increased its flying schedules by 40% between January and March, and expects to return to “around” pre-pandemic capacity levels over the summer. Its growth plans are similar to those of British Airways but well short of Ryanair, which is already above its 2019 capacity. EasyJet reported “robust” operations over Easter despite the impact of French air traffic control strikes, and industry executives hope the smooth getaway will reassure passengers who fear a return of last year’s travel disruption, which was caused by industry-wide staff shortages.<br/>