24th Jul 2024 11:45
(Alliance News) - easyJet PLC bucked a trend set by budget airline peer Ryanair Holdings PLC and reported decent trading, helped by a reportedly impressive performance from its holidays arm.
easyJet shares rose 5.0% to 449.00 pence each in London on Wednesday morning.
The stock is down 1.8% since the end of last week, following a 7.1% tumble on Monday in response to Ryanair's poorly-received update.
The update from easyJet lifted travel sector spirits, after Dublin-based Ryanair's pricing warning hit shares at the start of the week.
The Luton, England-based budget airline said pretax profit increased by 16% to GBP236 million in the quarter that ended June 30 from GBP203 million a year before.
easyJet said revenue increased by 11% to GBP2.63 billion from GBP2.36 billion a year before. It attributed this to an 8% increase in passenger growth in the quarter.
easyJet said that seats flown were up 7% on-year to 28.1 million for the quarter.
The airline added that it has now sold 69% of bookings for the final quarter.
Chief Executive Officer Johan Lundgren commented: "Our strong performance in the quarter has been driven by more customers choosing easyJet for our unrivalled network of destinations and value for money".
Looking forward, easyJet expects to continue the trends of the third quarter for a capacity of around 100 million seats for the 2024 financial year.
It also expects easyJet holidays to deliver profit growth of 48% to over GBP180 million for the year. Davy noted easyJet had previously predicted profit above GBP170 million for the unit. The package holidays offering was launched back in November 2019, so not long before the onset of the Covid-19 pandemic which caused global travel curbs and emptied skies.
Away from the holidays unit, Irish broker Davy noted the airlines arm's "key metrics point in the right direction". Third-quarter capacity rose, the load factor increased and revenue per seat expanded.
RBC Brewin Dolphin analyst John Moore commented: "Ryanair's results earlier in the week cast a shadow over airlines, but easyJet's performance should provide a level of assurance that conditions aren't necessarily gloomy across the entire sector.
"Profits and bookings remain on a positive trajectory, while its easyJet Holidays offering is making an even more meaningful contribution to the company's bottom line.
Moore continued: "Concerns over the longevity of the post-Covid travel boom will likely hang over airlines for some time yet. But today's results demonstrate that easyJet is in a better position than many of its peers and should be able to pull through this turbulent spell."
Ryanair on Monday said quarterly profit nearly halved, as revenue declined slightly due to lower ticket prices despite carrying more passengers. The weakness in fares is expected to continue throughout the summer, it warned.
"While Q2 demand is strong, pricing remains softer than we expected, and we now expect Q2 fares to be materially lower than last summer," Chief Executive Officer Michael O'Leary said in a statement.
Ryanair had previously predicted second-quarter fares would be "flat to modestly up".
By Eric Cunha, Alliance News news editor
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