- easyJet first-half revenue rose 8% to £3.5bn.
- Pre-tax losses widen by 13% to £394mn, as expected.
- Full-year guidance maintained, with pre-tax profits of £703mn expected.
Aarin Chiekrie, equity analyst, Hargreaves Lansdown:
“easyJet has shown markets it’s on the right flight path, with first-half losses landing in line with market expectations. Losses over this period aren’t surprising given the cyclical nature of easyJet’s business. Much more important was the outlook for the all-important summer season, and on that front easyJet delivered.
Bookings for the second half are flying high. They’re running ahead of last year’s pace, and solid demand means pricing is holding up well. easyJet’s doing a great job of growing its fleet, and on average, more of the available seats are being filled too. Given the high fixed costs associated with flying planes, keeping them as full as possible is key to profitability. Lower oil prices are also helping to keep full-year profit guidance on track, given that they account for such a significant chunk of airlines’ costs.
The package holiday arm is also seeing impressive growth. Revenue and profits grew at high double-digit rates in the first half, albeit from a small base. Performance is set to pick up further in the second half, and the segment is on track to deliver its medium-term pre-tax profit target of more than £250mn ahead of schedule.
All in, underlying performance is pleasing – the group’s doing a great job of growing its fleet, stimulating demand, and keeping costs under control. But investors should keep in mind that tariffs could bring new turbulence to the industry, and if that happens, consumer demand could come under pressure.”
