Yahoo Finance EasyJet says BA and Ryanair strikes have boosted its profits
EasyJet has been given a lift by recent strikes at rivals British Airways and Ryanair, which boosted its revenues and profits.
The budget airline expects to make headline pretax profits of £420m to £430m for the year to 30 September. This is at the top end of City forecasts but will still be below last year’s profits of £578m.
More than 2,000 BA flights were grounded last month when pilots went on strike for two days. BA owner IAG has warned that the walkouts would reduce this year’s profits by €137m (£122m). There are additional costs caused by threatened strikes by ground staff at Heathrow airport and lower bookings at its Vueling carrier, which means IAG’s full-year operating profits will be €215m lower than last year’s €3.48bn.
Ryanair pilots also took industrial action in September, prompting some travellers to switch to other airlines, although Ryanair flights ran as scheduled in the end.
EasyJet said the strikes helped its revenue per seat increase by 0.8% in the second half, compared with its previous expectation that the figure would be “slightly down”.
Its chief executive, Johan Lundgren, said: “As a result of our self-help initiatives and the increased demand due to disruption at British Airways and Ryanair, we anticipate achieving headline profit before tax for the full year 2019 of between £420m and £430m, in the upper half of our previous guidance range.”
EasyJet had previously pencilled in a full-year profit of £400m to £440m.
Richard Hunter, head of markets at trading platform Interactive Investor, said: “The unfortunate demise of Thomas Cook could also provide further opportunities.”
He added, however: “The full ramifications of the UK’s departure from the EU have yet to wash through, either in terms of any future sterling weakness, which could crimp consumer demand or indeed additional travel regulations, which would add further cost.
“Meanwhile, the industry remains one typified by an intensity of competition which has seen a number of smaller players go to the wall over recent years.”
Thomas Cook, the world’s oldest travel firm, collapsed last month after running out of cash. It has struggled to keep up with changing customer habits and intense competition from budget carriers such as easyJet.
