EasyJet reports strong first quarter boosted by Thomas Cook collapse

EasyJet said it was on course for a strong winter, after reporting a leap in revenues for the last quarter of 2019, partly boosted by the demise of Thomas Cook.

Passenger numbers grew by 2.8% year on year, despite widespread disruption from strikes in France during which 871 flights were cancelled between October and December.

The airline said that robust demand and slow capacity growth, with only 1% more seats flown, contributed to an increase in revenue per seat of almost 8.8%. It ascribed about one-fifth of that growth to the collapse of rival Thomas Cook last September.

While it traditionally struggles to make money through the winter months, easyJet said it was on target for losses “better than 2019” in the first half of the financial year, despite an increased fuel bill.

Johan Lundgren, easyJet chief executive, said the airline had “made a strong start to the year with continued positive momentum”. EasyJet shares rose 4%, making it the top riser on the FTSE 100 on Tuesday.

The results were met with relative approval by the company’s founder and main shareholder, Sir Stelios Haji-Ioannou, previously a thorn in the side of the airline’s management. In a letter to fellow shareholders, he said that as the slow growth in the number of seats flown had led to higher revenues, “I’m pleased to see in today’s Q1 results that my theory about airline economics remains true”.

He said he was optimistic but believed dividends should have been significantly higher, and therefore would have cast a “token vote” against the re-election of the chairman, John Barton, as “constructive criticism” at the upcoming annual meeting.

Meanwhile, Lundgren said the airline had benefitted from its decision to offset the carbon emissions from all flights since November. He said: “Nine million customers have flown net-zero carbon flights with us and our offsetting programme has been received very positively by customers, staff and other stakeholders.”

Lundgren said that, according to easyJet’s internal research, those customers who were aware of its offsetting policy reported more overall satisfaction with their flight than those customers who did not know.

He added: “We’re clear that it is an interim measure and we are looking for new technologies to reduce the emissions in the first place.”

The airline has partnered with Airbus and Wright Electric in schemes to develop sustainable planes and inform how they would work commercially. He said Wright remained hopeful of developing a scaled-up electric passenger plane within a decade, a few years ahead of Airbus forecasts.

Lundgren said: “The aim is for a 150-seater short-haul plane to be on the market by the end of the 2020s, based on the acceleration of battery technology … The exploration is fascinating and we are pleased and excited. We are working with Airbus to see how planes will work in the kind of fleet we have – with the infrastructure of the airport, can we achieve it with the turnaround times we have. There are a lot of issues, but there are very promising developments.”