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FTSE 250: EasyJet revenue up after record demand for bookings

PARIS, FRANCE - AUGUST 31: Ramp personnel handle checked luggage out of easyJet Airbus A320-214 in Terminal 3 of Orly Airport on August 31, 2022 in Paris, France. Regular and low-cost airlines are enjoying a successful summer from the rebound in air transport activity in post COVID-19 pandemic era. (Photo by Horacio Villalobos#Corbis/Corbis via Getty Images)
As customers purchase flights for the year ahead EasyJet said it would expand its summer flight schedules. Photo: Horacio Villalobos#Corbis/Corbis via Getty

EasyJet's (EZJ.L) revenue per seat increased by 32% in the past 12 months after the company saw a “strong and sustained” demand for travel despite the cost of living crisis.

The company saw a record demand for bookings so far in the month of January, and as customers purchase flights for the year ahead EasyJet said it would expand its summer flight schedules.

Johan Lundgren, EasyJet’s chief executive, said this would put the airline “firmly on the path to delivering a full-year profit”, and forecasted that the airline would beat current market expectations.

After posting a revenue growth of 32% for the past 12 months, EasyJet shares were up 47p, a rise of 10.15% to 515.50p on Wednesday.

The growth in revenue was bolstered by the aviation firm's EasyJet Holidays arm, which remains the UKs fastest growing major holiday company, with a 161% increase year on year in customers.

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As demand for overseas travel increased over the past 12 months, EasyJet saw growth at specific airports, such as Gatwick, Porto, Lisbon and the Greek islands.

Lundgren said: “The 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.”

Richard Hunter, head of markets at Interactive Investor, said: “EasyJet’s low-cost appeal continues to resonate with consumers, as the airline got off to a flying start in its new financial year.

"Revenues rose by 83% from the previous year, with the figure of £1.47bn beating expectations of £1.36bn. Indeed, each of the key metrics showed a marked improvement from the corresponding period last year, such as an increase of 47% in passenger numbers, 36% in revenues per seat and a load factor which increased from 77% to 87%.

"In addition, the group is seeing the benefit of increasing ancillary revenues, which in the period accounted for £406m of the £1.47bn total.

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"These additional revenues include the likes of customer payments for personally allocated seats, baggage and food and such revenues have grown by 85% compared to pre-pandemic levels, showing a strong direction of travel.

"Meanwhile, its previous foray into widening the travel experience by launching EasyJet Holidays continues to attract the attention of a conservative consumer, with a profit contribution of £13m for the quarter comparing with a loss of £1m the year previous.

"Of course, headwinds remain on EasyJet’s recovery path. The cost per seat in the quarter rose by 76%, largely driven by a strong US dollar and higher fuel costs, there were one-off costs associated with leased aircraft and the overall result was a pre-tax loss of £133m, although the number represents a marked improvement year-on-year from a loss of £213m."

Watch: EasyJet: holiday demand strong despite headwinds