EasyJet on course for profit growth thanks to beach holiday demand

Early demand for beach holidays has kept easyJet on course for increased profits despite French air traffic strikes and a fire at its Rome airport base.

The airline’s third quarter revenues dipped slightly year-on-year despite flying more passengers on fuller planes. It flew 19.1 million passengers between April to June, up 6.% from the same period in 2014.

EasyJet was forced to cancel more than 1,300 flights in April because of a strike by French air traffic controllers and the fire at Fiumicino airport, although it has since announced the closure of its Rome base.

Lower fuel costs than in 2014 helped offset the losses incurred from those events and EasyJet said its routes to beach destinations had performed well.

But the airline warned of an “uncertain macro and operational environment” such as the economic crisis in Greece, the Tunisian beach massacre and the potential for more air traffic control strikes.

Despite the uncertainty, easyJet said it expected annual pre-tax profits to increase from £581m in 2013-14 to between £620m-£660m this year.

Its chief executive, Carolyn McCall, said revenue and dividends would continue to grow, claiming that the third quarter results “shows that easyJet’s strategy continues to deliver, in particular with good performance in the UK and beach routes across Europe”.

Shares rose just over 4% on the guidance, having slumped in May after easyJet issued a profits warning.

Analyst Gerald Khoo of Liberum said the airline’s update was reassuring given that investors had been prepared for worse news on revenues.

Powered by Guardian.co.ukThis article was written by Gwyn Topham, for The Guardian on Wednesday 22nd July 2015 13.27 Europe/London

guardian.co.uk © Guardian News and Media Limited 2010


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