Britain's easyJet encouraged by pricing trends as it outlines Air Berlin costs

Andrew Cummings
November 21, 2017

Pre-tax profits at easyJet slumped 24pc to £385m a year ago, despite a record 80.2m travellers choosing to fly with the budget airline.

The pre-tax profit figure came in after EasyJet said last month that pre-tax profits would be at the upper end of its guidance range, in the range of £405m to £410m, reflecting a "continuing improving revenue performance".

Shares in easyJet (LON:EZJ) have rallied more than five percent in London this morning, as the lowcost carrier revealed that it had seen "encouraging" trends in the first quarter of the new financial year, amid the collapse of rivals Monarch, Air Berlin and Alitalia.

This is in line with the company's policy of paying out half of headline profit after tax.

The airline flew a record 80 million passengers over the last 12 months, with capacity increasing 8.5% and load factor - a crucial gauge in the airline industry, which measures the number of seats filled on a plane - reaching a record high 92.6%. Passenger numbers were almost 10 per cent higher at 80 million.

Easyjet said earnings had continued to climb in the first quarter of this year, "primarily as a result of some capacity leaving the market".

EasyJet said the battle for business with competitors, such as Ryanair, left revenues per seat falling 7.8% at constant currency - meaning the effects of fluctuations in the value of the pound are stripped out.

EasyJet, which also has a base at Schoenefeld airport, the German capital's other main aviation hub, said around 1,000 Air Berlin pilots and cabin crew will be taken on board as part of the deal.

Going forward, easyJet said that it was planning to grow capacity by around six percent for the 2018 financial year.

"EasyJet's model is resilient and sustainable and we now have a huge amount of positive momentum", said chief executive Carolyn McCall.

The airline is expecting £100 million in one-off costs associated with the deal.

EasyJet shares rose 4 per cent after its trading update.

Other reports by iNewsToday