EasyJet raises earnings target again as bookings remain strong

EasyJet raised its earnings target for a second time this year amid strong bookings into the crucial summer period and robust demand during the recent Easter vacation.

The discount specialist now expects to beat revised market expectations that foresee a pretax profit of £260 million (€294.6m) this year, according to a statement on Tuesday, up from a previous goal of beating pretax profit expectations of £126 million (€142.8m).

Revenue per seat for its fiscal third quarter will rise about 20 per cent, EasyJet said following what the company called “robust” sales during the Easter period when it operated about 1,600 flights a day – almost full operation. The carrier expects almost full pre-pandemic capacity during peak the summer period.

“We see continued strong booking momentum into summer as customers prioritise spending on travel,” chief executive, Johan Lundgren, said in the release.

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The shares rose as much as 4.2 per cent in early trading on Tuesday morning. The stock has gained about 62 per cent this year, the best performer on the Bloomberg World Airlines Index of 29 members in the period.

The CEO said on a call with journalists that fares stand to be higher than they were in 2019 because costs have increased. Airlines have cautioned that ticket prices are increasing amid higher demand as well as increased costs on everything from fuel to staffing to efforts to decarbonise the industry.

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Discount carriers including EasyJet and bigger rival Ryanair Holdings are benefiting from a combination of rebounding demand for summer travel alongside travelers trading down during the cost-of-living squeeze. Air travel in Europe has soared and carriers are looking to repair balance sheets wreaked by the pandemic and ensuing travel restrictions.

EasyJet said in January that it expects to beat market expectation for a full year pretax profit and said that its loss in the first half would be significantly better than in the same period a year earlier. – Bloomberg