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EasyJet Earnings Rise with More Business Travelers and Fees

Jul 27, 2013 5:27 am

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Budget carriers have learned that short-haul routes only need a few minor tweaks — preferred seating, more flights — to attract business travelers.

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Srdjan Zivulovic  / Reuters

EasyJet aircraft takes of from Ljubljana's airport Brnik. Srdjan Zivulovic / Reuters


EasyJet Plc boosted sales almost 11 percent to 1.14 billion pounds ($1.75 billion) in the three months through June as Europe’s second-largest discount carrier added capacity in the U.K., Switzerland and Italy.

Revenue per seat, reflecting average fares plus income from ancillary charges, rose 6.1 percent to 61.44 pounds at constant currencies, EasyJet said in a statement. Pretax profit for the 12 months to Sept. 30 will be in a 450 million pounds to 480 million pounds range, versus 317 million pounds a year earlier.

EasyJet is ramping up efforts to draw corporate flyers with allocated seating, flexible tickets and higher frequencies on key routes, and began fast-tracking flexi-fare clients in May. Cuts at network carriers helped EasyJet lure 10 million business travelers in 2012, and rivals reduced capacity on overlapping routes by 500,000 seats in the three months, the carrier said.

“EasyJet has delivered a strong performance in the third quarter in a benign capacity environment,” Chief Executive Officer Carolyn McCall said in the release, adding that almost three-quarters of the airline’s second-half seats are booked.

The company added 400,000 passengers in the period and increased capacity 3.6 percent, with its load factor, a measure of seat occupancy, sliding to 88.2 percent from 89.1 percent a year earlier as Easter fell in the previous quarter.

McCall has sought to multiply frequencies on services attractive to business clients while adding new routes from London to Moscow and between Milan and Rome Fiumicino airport.

Luton, England-based EasyJet grew U.K. capacity by about 4 percent in the three months, as well as scaling up its Swiss and Italian operations by 13 percent and 7 percent respectively.

Plans to buy 135 Airbus SAS jets worth $13 billion at list prices for delivery from 2015 were backed by shareholders this month, even as founder Stelios Haji-Ioannou decried the deal as bad for investors.

Dublin-based Ryanair, Europe’s No. 1 low-cost carrier, will report first-quarter results July 29.

Editor: Chris Jasper. To contact the reporter on this story: Kari Lundgren in London at klundgren2@bloomberg.net. To contact the editor responsible for this story: Benedikt Kammel at bkammel@bloomberg.net. 

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