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Mixed outlook for budget airline

EasyJet back in profit but facing £25m hit from strikes

carolyn mccallBudget airline easyJet beat expectations and returned to profit in the first six months of the year, but has warned that it will take a £25 million hit from strike action in France.

It turned last year’s £53 million first half loss into a  £7m profit in the six months ended 31 March. Analysts had predicted a range of  between a loss of £5m and a profit of £10m.

The company said it benefited from the lower fuel prices and favourable currency movements as well as a strong finish to the ski season.

However, it said April has been “a more difficult month” due to increased disruption with over 600 cancellations, the majority of which were caused by the extended French Air Traffic Control strikes.  This is expected to wipe £25m from pre-tax profit. 

The company expects revenue per seat at constant currency for the second half of the financial year to decrease by low single digit percentage points. Third quarter revenue per seat at constant currency will be affected by the early Easter.

EasyJet still expects cost per seat at constant currency excluding fuel to increase by around 2% in the second half of the financial year and by up to 2.5% for the full year assuming normal levels of disruption. 

Carolyn McCall, easyJet chief executive said:  “As we enter the important summer season forward bookings are in line with last year and as we predicted passengers are benefitting as fares fall to reflect a more competitive operating environment and lower fuel costs.  easyJet continues to be well positioned to grow revenue and profit this year, delivering sustainable returns to shareholders due to its compelling network, low cost base and strong balance sheet.”

The company returned £180m or 45.4p per share to shareholders through the payment of an ordinary dividend at an increased payout ratio of 40% of profit after tax for the year ended 30 September 2014.

 

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