Even though easyJet’s revenue has risen by 7.7% during the three months to December 2013, the low-cost airline’s share price has taken a knock, dropping 3% on the open today since growth is slowing. In an interim management statement, easyJet reported a 4.2% rise in passenger numbers to 14.3m, with a load factor of 88.7% but has warned that first half pre-tax losses will be greater than last year, at between £70m and £90m. Last year the carrier reported a £61m pre-tax loss.
“With first half bookings in line with last year, easyJet expects to report a first half loss before tax of between £70 million and £90 million assuming normal levels of disruption compared to the £61 million loss reported in the first half of last year,” the airline warned. “Last year Easter fell on 31 March resulting in £25 million additional revenue in the first half of 2013. In this financial year Easter will fall in April.”
Revenue per seat grew as expected by 3.4% on a reported basis to £55.71 per seat or by 1.4% at constant currency despite strong prior year comparators from post-Olympic trading in the UK and a challenging competitive environment. The airline stated that: “The growth in revenue per seat was driven by careful management of capacity, combined with the performance of allocated seating and the management of fees and charges. Revenue per seat also benefited from longer average sector lengths in the quarter.”
Cost per seat excluding fuel increased by 3.0% on a reported basis and by 1.2% on a constant currency basis. This was driven by anticipated increases in charges at regulated airports and by increases in maintenance costs associated with the planned ageing of the fleet and increased proportion of leased aircraft. Commenting on the results, Carolyn McCall, easyJet Chief Executive said: “easyJet has made a good start to the year. We have delivered revenue per seat growth in the quarter against a challenging competitive environment and the tough comparison with the prior year. The performance in the quarter demonstrates our continued focus on cost, progress against our strategic priorities and easyJet’s structural advantage in the European short-haul market against both the legacy and low-cost competition.
Our strategy of offering our customers low fares to great destinations with friendly service and a focus on cost control ensures that we can continue to deliver sustainable growth and returns for our shareholders.”