Yahoo Finance Plane strikes at rivals boost demand at EasyJet
EasyJet (EZJ.L) said on Tuesday that strikes at rivals British Airways and Ryanair boosted its revenue in the second half of its financial year.
The low-cost airline had previously warned that revenue per seat would be “slightly down” compared with the same period in 2018.
EasyJet said that before-tax profits for the 12 months to the end of September would likely come in between £420m and £430m, in the upper range of its previous forecast.
The airline expects passenger numbers in the year to climb by 8.6% to 96 million, largely due to a 10% increase in capacity. Load factors — a key metric in the airline industry that measures how many seats are filled — will increase by 1.4 percentage points, to 91.5%.
Ryanair (RYA.L) was hit with a series of strike-related issues in September. While British pilots called off the majority of planned strikes, the airline was forced to cancel several flights in Spain after cabin crew in the country announced a 10-day walkout.
British Airways was hit more severely: more than 2,000 flights were cancelled as part of a two-day pilot strike. British Airways parent IAG (IAG.L) said the strikes cost it more than £120m, and that full-year profits will be dented as a result.
"EasyJet has continued to perform in line with expectations, despite challenging market conditions,” said CEO Johan Lundgren.
Costs at the company increased by about 12%, the airline said, noting that higher fuel costs and “adverse” foreign exchange movements were to blame. EasyJet said that fluctuations in currency prices dented its bottom line by around £14m.
Excluding fuel prices, per-seat costs will decline by around 0.8%.
Looking ahead to its 2020 financial year, EasyJet said that bookings in the first quarter were in line with the same period in 2019. But it said that it expected capacity growth to slow, coming in at just 2%.
The airline announces its full-year results on 19 November.
