Easyjet narrows loss as business travelers give it a lift

Days after another spat with founder Sir Stelios Haji-Ioannou, budget airline Easyjet has soared nearly 4% after a positive update.

The company said first quarter revenues rose 9.2%, with the results boosted by an increase in business travellers as rivals reduced capacity. With around 80% of its first half seats booked, the company expects to keep its interim loss to between £50m and £75m, compared to £112m for the same period last year.

Its shares have climbed 33p to 888p on the news. The company has been criticised by Stelios for its plans to buy more planes, to the point where he has marginally cut his shareholding and threatened to sell more shares.

In a hold note, James Hollins at Investec said:

Easyjet’s first quarter revenue and margin performance were marginally better than we had expected and there is upside pressure on our 2013 estimates. However, we think it would be wrong to adjust full year numbers yet as second half comparisons are tough and recent poor weather highlights the usual issues facing airlines that were virtually non-existent in 2012.

 

The key takeaway from the statement is a clear commitment, in our view, to a major new aircraft order that could raise the wrath of easyJet’s major shareholder.

Meanwhile Credit Suisse raised its 2013 profit forecast by 9% and moved its target price from 884p to £10.

News of the growth in business travel also gave a lift to International Airlines Group, the owner of British Airways and Spain’s Iberia, which is up 3.1p to 211.4p.

This article originally appeared on guardian.co.uk