EasyJet Plc reported fiscal third-quarter profit that beat analyst estimates and predicted strong demand into the end of the year, while cautioning that strikes across the industry create “challenging conditions” during the peak travel period.
The UK low-cost airline reported a pretax profit of £203 million ($262 million) in the period. That beats the £161-million average estimates of analysts tracked by Bloomberg. Revenue per seat, a key metric for profitability, increased 23% in the period.
Discount carriers have benefited from the surge in demand this summer as people jet abroad for sunny vacations following the travel lull due to Covid-19. To help spur growth, EasyJet said it’s started the process of securing more aircraft orders to replace older jets in its all-Airbus SE fleet.
“Moving into this winter, EasyJet is seeing good booking momentum, with sold ticket yields and load factors ahead year on year, and planned capacity up over 15% for the December quarter,” the company said.
The company said the strong momentum has continued into the first quarter of 2024. Revenue per seat in the fiscal fourth quarter is set to gain 10% year-on-year, with costs per seat remaining broadly flat, EasyJet said.
Booking Trends
Chief Executive Officer Johan Lundgren said he expects to deliver another record pretax-profit performance in the fourth quarter, helped by the addition of more than 15% extra capacity as bookings remain ahead of last year.
EasyJet is among airlines affected by the industrial action taking place in the aviation industry across Europe. The carrier canceled almost 2,000 flights between July and September at London Gatwick Airport, in what the airline on Thursday called “unprecedented ATC disruption” by air-traffic controllers.
EasyJet has risen about 52% this year, pushing it to the top of the Bloomberg World Airlines Index. Rival Ryanair Holdings Plc, meanwhile, has gained 35% in the period, and British Airways owner IAG SA is up by 27%. The discount carrier is the first European airline to report earnings for the quarter, with Ryanair’s results scheduled for Monday and Wizz Air in early August.
(Updates with more detailed outlook from fifth paragraph.)