EasyJet hikes its profit forecast as its Austrian airline takes off

Emma Haslett
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EasyJet chief executive Carolyn McCall announced plans to step down this week (Source: Getty)

EasyJet may have hit turbulence in recent days after its chief executive was poached by ITV, but today it said revenues had risen in its third quarter.

The figures

Total revenues for the three months to the end of June rose 16 per cent to £1.39bn, thanks in part to the later Easter, higher load factors and an improved environment, said the airline. That is likely to put full-year profits somewhere between £380m and £420m, higher than the £375m expected.

Passenger numbers rose 10.8 per cent to 22.3m, while load factor increased 1.1 percentage points to 93.1 per cent.

Meanwhile, headline cost per seat dipped 5.5 per cent to £48.98 at constant currency, thanks to falling oil prices. Excluding fuel, though, that figure rose 1.6 per cent, which it put down to investment.

Shares fell 2.2 per cent to 1,382p in early trading.

Read more: Easyjet's Carolyn McCall will pilot ITV to new heights, investors hope

Why it's interesting

EasyJet has been pretty vocal about the effects of Brexit on the UK's airlines, and last week put its money where its mouth is by setting up an Austrian airline, EasyJet Europe, which it said today has been awarded an airline operating licence by the country's Federal Ministry for Transport, Innovation and Technology, meaning its first flight takes place today.

That means EasyJet now has three European airlines, headquartered in the UK, Switzerland and Vienna, although it was at pains to point out no jobs will move from the UK to Austria.

Meanwhile, low oil prices have helped to balance out what Carolyn McCall described as "a difficult 18 months of external challenges" as falling consumer confidence put pressure on airlines to keep their fares low.

The news comes two days after McCall announced she was off to run ITV, stepping down from EasyJet by the end of the year.

Yesterday the airline said new non-executive director Moya Greene, who is also chief executive of Royal Mail, will join the board this month instead of September to step up the search for a replacement for McCall.

Read more: Ryanair passenger growth outpaces rival Easyjet

What EasyJet said

McCall said:

Our purposeful and disciplined growth continues to strengthen our market positions and we are seeing an underlying improving revenue trend. Our continuing product and digital innovation is generating revenue growth. Our underlying cost control is strong, while our investment in resilience is delivering results in our operational performance.

Although we expect capacity to continue to put pressure on yields, our progress this year has enabled us to upgrade this year's [pre-tax profit] forecast and demonstrates that after a difficult 18 months of external challenges EasyJet once again has positive momentum.

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