Budget airline EasyJet (EZJ) is on the up off the back of strong results, as revenue per seat growth is now expected to be positive by ‘low to mid-single digits’ in the first half, driven by some capacity leaving the market.
The good news overshadowed a 17.3% drop in headline pre-tax profit to £408m in the year to 30 September. Analysts attribute the fall to lower ticket prices, currency headwinds and higher costs.
EasyJet reported an ‘adverse headline currency impact of £101m' over the same period.
Overall sales are up 8.1% to £50.47m despite flat revenue per seat year-on-year at £58.23 as ancillary sales picked up the slack. Ancillary sales rose 17.8% to £986m.
EasyJet has increased its passenger numbers 9.7% year-on-year to 80.2m and hit a record load factor of 92.6%, up from 91.6% in 2016.
DIFFICULT YEAR FOR AIRLINE INDUSTRY
It has been a difficult year for the airline sector with Air Berlin filing for insolvency and British charter Monarch Airlines entering administration.
EasyJet is taking advantage of Air Berlin’s troubles, looking to acquire some of its operations at Berlin Tegel airport for €40m.
However Canaccord Genuity analyst Gert Zonneveld warns the significant competition that EasyJet has experienced on its network is likely to continue, with anticipated yield pressure expected to stunt earnings growth.
