EasyJet expects record summer as peak season profits take off

EasyJet is anticipating a record summer this year after the airline reported higher profits thanks to increased demand.

The budget airline – Europe’s second-biggest after Ryanair – revealed on Wednesday that it had sold 1.5 million more seats in the peak season than in the same period last year in the three months ending in June.

The company said it carried 25.3 million passengers during the period, an 8 percent year-over-year increase, thanks in part to the strong performance of its vacation package business.

Combined with increased sales of ancillary products, this helped EasyJet’s overall third-quarter turnover expand 11 per cent to £2.6bn and its pre-tax profit grow £33m to £236m.

EasyJet now forecasts its package holiday division will make more than £180m in pre-tax profits this financial year.

EasyJet’s outgoing chief executive Johan Lundgren said the result was achieved despite the Easter weekend falling earlier than usual this year.

He said this demonstrated “the continued importance of travel and means we remain on track to deliver another record-breaking summer.”

Lundgren intends to step down from his role in early 2024 after a turbulent seven-year period indelibly marked by the Covid-19 pandemic.

The harsh restrictions on cross-border travel imposed earlier this decade caused considerable financial damage to the global airline industry, resulting in massive job losses and the bankruptcy of some airlines.

EasyJet reported annual pre-tax losses of £1.3bn and £1bn in 2020 and 2021 respectively, due to falling demand for foreign holidays.

Since then, trade has recovered strongly despite problems with strikes, staff shortages and the war between Israel and Hamas deterring people from flying to the Middle East.

The company’s latest trading update comes just days after Ryanair reported a sharp drop in profits and warned that fares would be “materially lower” this summer.

Ryanair revealed its profits fell 46 per cent to €360m (£303m) in the April to June period due to an average 15 per cent reduction in customer fares.

His announcement sent a wide-ranging shock through airline stocks, which were already reeling from last Friday’s global computer outage.

EasyJet shares were the top-performing stocks in the FTSE 100 index on Wednesday morning, up 6.1 per cent to 453.9 pence.

John Moore, senior investment manager at RBC Brewin Dolphin, said: ‘EasyJet’s performance should provide a level of reassurance that conditions are not necessarily bleak across the sector.

‘Concerns about the longevity of the post-Covid travel boom are likely to continue to weigh on airlines for some time… But today’s results demonstrate that EasyJet is in a better position than many of its peers and should be able to weather this turbulent period.’