7th Feb 2008 07:00
easyJet PLC07 February 2008 7th February 2008 EASYJET INTERIM MANAGEMENT STATEMENT 1st October 2007 to 31st December 2007 Highlights: • Total revenue per seat grew by 0.5% to £36.98 versus the same period last year, driven by strong growth in non-UK originating passengers • Full year guidance of an improvement of around 20% in profit before tax on the prior year is maintained • Debt facilities for $1 billion of aircraft financing secured at favourable rates • Integration of GB Airways, following completion of the acquisition on the 31st January2008, now underway Quarter ending Dec 31st 2007 Dec 31st 2006 Change Passengers (m) 1 9.1 8.1 12.4%Seats (m) 11.3 10.0 13.6%Load factor (%) 2 80.8 81.7 (0.9)pp Total revenue (£m) 3 418 366 14.1%Passenger revenue (£m) 3 361 331 9.0%Ancillary revenue (£m) 3 57 35 61.9% Including checked bag charge Total revenue per seat (£) 36.98 36.79 0.5%Passenger revenue per seat (£) 31.91 33.24 (4.0)%Ancillary revenue per seat (£) 5.06 3.55 42.6% Including checked bag charge Total revenue per passenger (£) 45.76 45.05 1.6% Average operating aircraft 131 114 15.5%ASKs (bn) 11.1 9.5 17.7%RPKs (bn) 9.1 7.8 16.7%Average sector length (km) 986 952 3.6% Commentary: Quarter 1 performance Passenger numbers grew 12.4% in the quarter to 9.1 million. The majority of thegrowth was achieved through the successful development of European markets,particularly Italy, Spain and Switzerland. As a result of the investment inthese regions, total non-UK originating passengers increased significantly, by22%, in the period. UK originating passenger numbers grew by 5%. Total revenue per seat grew ahead of expectations, up 0.5% helped by thestrengthening Euro and the introduction of the checked bag charge, which isreported as part of ancillary revenue. Passenger revenue per seat (excluding ancillary revenue) declined by 4% versusthe comparative period and continues to be impacted by the doubling of UK AirPassenger Duty in February 2007. A significant proportion of easyJet's passengerrevenues are Euro denominated and unit revenues have benefited from thestrengthening of the Euro. Passenger revenue trends shown in the table belowhave improved. Passenger revenue per seat Q3 '07 vs Q3 '06 Q4 '07 vs Q4 '06 Q1 '08 vs Q1 '07 (9.7)% (7.0)% (4.0)% Ancillary revenues grew by 61.9% in the period, largely as a result of theintroduction of the £2 checked bag charge from 1st October. This charge wasincreased during the quarter to £3.99. Average load factors for the quarter declined slightly, down 0.9 basis pointsversus the same period last year due to specific competitive issues, which areactively being addressed. Load factors for London-based aircraft were ahead oflast year, with a particularly strong performance at Gatwick, however, asexpected the average load factor on aircraft based at Madrid was below easyJet'saverage in the period, reflecting the investment in the development of theSpanish business. Over the past 12 months, easyJet's load factors at Madrid haveoutperformed those of other low cost competitors. Key developments During the period, easyJet completed a major aircraft financing program securingdebt facilities for around $1 billion at rates that compare favourably withexisting debt financing, demonstrating that even in current credit marketconditions easyJet is able to receive strong support from the financingcommunity. The bilateral facilities build upon existing relationships and create new ones.They include Alliance & Leicester, Bank of Tokyo Mitsubishi, BNP Paribas,Commerzbank AG, Fortis, HSH Nordbank, ING, Natixis, SMBC and West LB. Theadditional funding will be used to finance approximately 50% of easyJet'saircraft deliveries over the next three years. The acquisition of GB Airways was completed on January 31st 2008. As a resulteasyJet is now the leading passenger airline operating out of Gatwick and isoffering services from Manchester for the first time. Outlook Forward bookings are in line with expectations despite the uncertainmacro-economic environment. Load factors were down slightly in the first quartercompared to the prior year and it is expected that the second quarter loadfactor will be down by a similar amount. Although the load factor for January2008 declined by 2.9%, forward bookings for February and March show an improvingtrend. Revenue for the second quarter is expected to continue to perform ahead of ouroriginal expectations due to the increase in the checked bag charge and thestrength of the Euro. Additionally, revenue per seat for the second half isexpected to benefit from moving beyond the first year impact of the increased UKAir Passenger Duty. Whilst revenues will be ahead of previous guidance, this impact is largelyoffset by an increase in costs denominated in Euros, principally airport costs,navigation and European based crew costs. Additionally, crew costs in the firsthalf of the year will be ahead of our original expectations. However, thesecosts are expected to come back into equilibrium in the second half. There hasbeen no material change in easyJet's hedging position with respect to jet fuelfor the current financial year. In the first half of the financial year it is expected that pre tax margins,excluding the impact of the acquisition of GB Airways will decline by 2 to 3percentage points, largely due to increased fuel costs. For the full yearprofit guidance remains unchanged with underlying profit before tax expected togrow by around 20%. The impact of GB Airways in the first half of the financial year is expected tobe a pre-tax loss of around £7m. This is slightly above normal levels due to theincrease in marketing investment to ensure a strong summer performance. On afull-year basis the acquisition of GB Airways will be earnings enhancing beforeintegration costs of around £12m, which will largely be incurred in the firsthalf of the financial year. END For further details please contact easyJet plc: Investors and analysts:Rachel Kentleton, Investor Relations +44 (0) 7961 754 468 Media:Toby Nicol, Corporate Communications +44 (0) 1582 525 339 Notes: 1. Represents the number of earned seats flown. Earned seats include seats that are flown whether or not the passenger turns up because easyJet is a no-refund airline, and once a flight has departed a no-show customer is generally not entitled to change flights or seek a refund. Earned seats also include seats provided for promotional purposes and to staff for business travel. 2. Represents the number of passengers as a proportion of the number of seats available for passengers. No weighting of the load factor is carried out to recognise the effect of varying flight (or "sector") lengths. 3. Represents statutory revenue (unaudited). This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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