EasyJet meets its expectations as losses widen on weaker customer demand
Source - SMW
EasyJet delivered a wider loss in the first half, in-line with its expectations as weaker customer demand weighed on ticket yields in the UK and across Europe amid Brexit and macroeconomic uncertainty.
For six months ended 31 March, the headline loss before tax widened to £275m from a loss of £18m a year earlier, and revenue rose 7.3% to £2,343m.
The revenue growth was led by capacity growth and a foreign exchange benefit, though negatively offset by, the 'impact of the move of Easter, the new IFRS 15 accounting standard and the annualisation of prior year benefits such as Monarch's bankruptcy and Ryanair cancelling a large proportion of its winter 2017/8 schedule in the UK,' the company said.
Passenger numbers for the first half of the year, increased by 13.3% to 41.6m, capacity increased by 14.5%, but the load factor decreased by 1% to 90.1%.
Total revenue per seat decreased by 6.3% to £50.71 and headline cost per seat increased by 3.9% to £56.66. EasyJet left its headline profit before tax expectations for fiscal 2019 unchanged and in line with market expectations, but did warn that capacity growth in fiscal 2020 would 'likely be at the lower end of its historic growth rates.'
Revenue per seat at constant currency in the second half was now expected to be slightly down, and headline cost per seat excluding fuel at constant currency was now also expected to be down for the full-year, the company said.
'I am pleased that despite tougher trading conditions, we flew more than 41 million customers, up 13% on last year, performed well operationally with 54% fewer cancellations in the period and customer satisfaction with our crew is at an all-time high. We have also continued to make good progress on our strategic initiatives in holidays, loyalty, business and with data, said Johan Lundgren, easyJet Chief Executive.
'Cost control remains a major priority for easyJet. Our focus is on efficiency and on innovation through data and we are on track to deliver more than £100m in cost savings during 2019.'