EasyJet takes off in London: profits down this quarter but positive signs for the summer

 (Il Sole 24 Ore Radiocor) - EasyJet shares soar on the London Stock Exchange, despite its third-quarter financial results showing a 70 per cent fall in profits. The low-cost airline’s share price rose by 5.7 per cent to 618.4 pence (FTSE 100 flat), with investors rewarding the company’s business updates, which provided sufficient reassurance regarding future prospects.

To begin with, the results showed a 2 per cent year-on-year increase in group revenue to £2.98 billion, the group’s pre-tax profit stood at £85 million, down from £286 million the previous year, marking a 70 per cent decline. The number of passengers carried during the period was 25.8 million, with a load factor of 88.9% (down 1 percentage point year-on-year). EBITDA fell by 38% to 304 million and EBIT fell by 65% to 104 million. The figure for third-quarter profit was largely attributed to a 17 per cent surge in fuel costs to 732 million, a direct consequence of the war in Iran which has destabilised the energy markets.

Management highlighted the strong last-minute demand for the summer and the continued growth of the holidays division as reasons for optimism ahead of the peak travel quarter. “As consumer confidence improves, we are seeing a narrowing of the gap in flight load factors for the peak summer season and a lengthening of the booking curve, as customers continue to prioritise travel and take advantage of our competitive fares,” commented CEO Kenton Jarvis.

The early signs for easyJet’s winter season appear to be more positive, with ticket prices rising compared with a year ago despite sales having only just begun, says Ruairi Cullinane, an analyst at RBC Capital Markets. Today’s rebound comes after a fall of around 11.6 per cent the previous day, when news emerged that the European Union was preparing to review the rules on airline ownership to prevent foreign investors from gaining effective control of European carriers.