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EasyJet Sees Double Digit Profit Growth in 2014 As Routes and Capacity Expand

Jul 24, 2014 9:30 am

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Meanwhile, Ryanair continues to tremble a bit.

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EasyJet planes at London Gatwick. easyJet


EasyJet Plc said annual earnings will gain at least 14 percent as Europe’s second-biggest low-cost airline adds capacity, pares costs and benefits from currency changes.

Pretax profit for the 12 months ending Sept. 30 will be between 545 million pounds and 570 million pounds ($928 million- $971 million), versus 478 million pounds a year earlier, the Luton, England-based carrier said today.

“This range includes the impact from the situations in Israel, Egypt and Moscow,” Chief Executive Officer Carolyn McCall said in a statement. EasyJet is “well positioned to continue to deliver sustainable growth and returns,” she said.

Under McCall, the carrier has intensified efforts to lure business passengers, offering allocated seats, flexible tickets, fast-tracking and higher frequencies on key routes. EasyJet will offer 6.7 percent more seats in the six months through September compared with a year earlier, adding routes from key destinations like Amsterdam Schipol and ramping up its presence at its biggest base at London Gatwick airport.

Sales in the three months through June gained 8.6 percent to 1.24 billion pounds ($2.11 billion). EasyJet grew capacity 6.8 percent over the quarter, driven by a 16 percent increase at Gatwick, to carry 17.9 million passengers. Load factors, reflecting seat occupancy, gaining 2.2 points to 90.4 percent.

Discount rivals such as Ryanair Holdings Plc and Norwegian Air Shuttle AS are also adding seats, while full-service carriers are striving to become more competitive via low-cost units including Germanwings at Deutsche Lufthansa and Barcelona- based Vueling at British Airways owner IAG SA.

EasyJet’s revenue per seat rose 2.7 percent to 62.47 pounds in the three months at constant currencies, helping by the Easter holiday. Costs excluding fuel increased by about 1 percent at constant currency, better than previously forecast.

Dublin-based Ryanair, Europe’s No. 1 low-cost carrier, will report first-quarter results July 28.

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

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