easyJet has reported a buoyant third quarter with passenger numbers up 16%, total revenue per seat up 12% and overall revenue up 32%.
Total revenue per seat grew to £46.36 in the three months ended 30 June, while the overall revenue rise to £641m was driven by ‘strong ancillary performance and the strengthening euro’.
Ancillary revenue jumped 93% to £7.45 per seat, mainly driven by the introduction of a checked baggage fee on 1 October 2007. The fee was hiked to £5 per bag at the end of March.
The rise in passenger numbers to 11.5m was attributed to continued growth at Gatwick, ‘with particular strength on the former GB Airways sectors and on routes to France and Italy’.
UK regional bases are delivering ‘good results’, particularly at Newcastle and Scotland, but Belfast remains ‘challenging’ as capacity has increased in the market.
Madrid is also challenging but has seen recent improvements in revenue per seat and easyJet’s load factors continue to be above those of its competitors.
Network expansion continues to focus on primary centres such as Milan Malpensa and Paris Charles de Gaulle.
During the quarter, total non-UK originating passengers increased by 25% and UK originating passengers by 9%. Average quarterly load factor declined by one percentage point to 83.5%.
easyJet said that revenue and costs – excluding fuel – were ‘performing to expectations’ and that over 50% of the expected full-year fuel cost increase of £185m has been offset.
Capacity growth has been reduced significantly for winter 2008/09 to around 4%-6% with flexibility to scale back further, the airline added.
Flying at less profitable times has been thinned and easyJet will reallocate capacity from weaker performing bases towards higher value opportunities including Gatwick, France and Italy. At Stansted, capacity will be reduced by 12% this winter.
In the second half total revenue per seat is expected to show ‘mid teens’ growth compared to the same period last year.
easyJet expects to deliver pre-tax profit before one-off costs in the range of £110m-£120m, assuming an average un-hedged fuel price of $1,280 per metric tonne for the second half of the financial year
Winter 2008/09 will be ‘challenging for the whole airline sector’, it said, due to higher fuel costs, although the carrier currently has 28% of its 2009 fuel requirement hedged at an average price of $1,265 per metric tonne.
A Report by The Mole
