- easyJet Q3 23 – 20/07 – having got off to a flying start to the year easyJet shares have plateaued and have settled at a steady altitude just below one-year highs. While there has been steady optimism that the travel sector will have its best year since 2019 as travel returns to normal there is also concern that higher fares could mean that capacity levels may never return to the levels, we saw pre-Covid. Travel disruption continues to be a factor determining, as well as deterring, a return to normal, nonetheless optimism remains high that easyJet will be able to see a return to profit this year. Its H1 numbers saw the airline report revenues in line with forecasts at £2.69bn, and a pre-tax loss of £411m, while costs were confirmed at £3.1bn. Airline ancillary revenue saw an improvement, rising 67% to £767m, with total revenue per seat rising 40% to £66.4m, although costs per seat were also higher at £77.6m, a rise of 19%. The airline's load factor was 87.5% over the half year, up from 77.3% a year ago with an expectation that this would move into the 90% during H2. Its H2 guidance of 56m seats, a rise of 9%, was left unchanged with Q4 capacity expected to come in at around pre-pandemic levels of 94%. The growing holidays operation continues to improve and expand, with customer numbers increasing to 0.6m during H1, a 0.4m increase on the same period last year. Revenues in this part of the business also improved, rising to £173m, with an expectation that the business will see an annual profit in excess of £80m. In the first half of this year the business generated a profit of £10m. EasyJet said it will also be expanding its holiday package market, with Switzerland being added this summer with a view to starting in early 2024. With the summer season well under way consensus forecasts for Q3 revenues to rise to £2.27bn, with passenger revenue rising to £1.75bn, with a load factor of 89.8%. This target might need to be revised given the amount of disruption seen so far this year due to French industrial action which also caused easyJet to cancel 1,700 flights earlier this month over the summer period.
