UK-based low-cost carrier easyJet expects strong summer bookings to help it return to full-year profit in 2023 and beat market expectations.
easyJet posted a loss before tax of £133 million for the quarter to the end of December (Q1), but this was an improvement over the prior-year quarter which booked a loss of €213 million.
Passenger revenue for the quarter increased to €975 million, with group revenue including ancillary revenue and easyJet Holidays revenue up at €1.474bn. easyJet's first quarter financial performance was ahead of expectations as yields strengthened, with revenue per seat increasing 36% year on year and airline ancillary revenue up 36% year on year at £20.12 per seat.
Significant fuel price increases year on year and the strengthened US dollar bumped up fuel cost per seat by 76% (£8.44) more than the same period last year. One-off costs were incurred during the quarter as 15 wet leased aircraft utilised in summer 2022 left the fleet at the end of October, confirmed easyJet. The airline’s financing costs benefitted from the strengthening of sterling versus the USD over the quarter which drove a non-operating, non-cash FX gain of £13 million.
"Whilst we remain mindful of the uncertain macroeconomic outlook across the globe, based on current high levels of demand and strong bookings, easyJet anticipates beating the current market profit expectations for full-year 2023," the company announced.
easyJet reports strong forward bookings for the Easter period, “with sold ticket yields +24% vs FY19” adding that easyJet Holidays were now more than 60% sold for this summer. Considering current levels of demand, the airline now expects to see growth of circa 50% on FY22 for its holidays.
The airline further noted that second half year ticket yields “continue the trend from H1, although load factors behind FY19 levels as later booking pattern continues”.
Johan Lundgren, CEO of easyJet, said: "This strong booking performance, aided by the airline's step changed revenue capability, has driven an £80m year on year boost in the first quarter with continued momentum as customers prioritise spending on holidays for the year ahead. easyJet holidays, the fastest growing holidays company in the UK, is upgrading its ambitious growth plans for the year given the strong demand.
"In summary, we expect to see our winter loss reduce significantly over the first half compared to last year. This will set us firmly on the path to delivering a full year profit, where we anticipate beating the current market expectation enabling us to create value for customers, investors and the economies we serve."
During Q1 easyJet flew 20.2 million seats, in line with guidance, a significant increase on the same period last year when easyJet flew 15.5 million seats. Load factor was 87% (Q1 FY22: 77%), due to increased customer demand coupled with restriction-free travel.
Passenger numbers in the quarter increased to 17.5 million (Q1 FY22: 11.9 million). easyJet has hedged 78% of its fuel requirements for the first half of 2023, and is 59% hedged for the second half of the year.