EasyJet reports 5.3% rise in revenue, 3.5% rise in passengers

EasyJet 737-700. Photo: Courtesy, easyJet.

EasyJet posted a 5.3% rise in revenue to £759.2 million ($1.2 million) on a 3.5% increase in passengers carried to 12.3 million for its fiscal third quarter ended June 30.

New CEO Carolyn McCall described the revenue increase as a “good commercial performance” in view of the volcanic ash disruptions in April “and, more recently, the combination of air traffic control industrial action and crewing issues in some parts of our network.” McCall replaced Andy Harrison as easyJet's CEO July 1 (ATW Daily News, March 25).

Recent data from the UK CAA revealed that easyJet's punctuality performance—especially at London Gatwick where it is the largest carrier—has deteriorated from the year-ago period, adding yet another element of discontent to the already tense relationship between the LCC and its founder and largest shareholder Stelios Haji-Ioannou, who stepped down from the board in May.

Haji-Ioannou, who initiated litigation with easyJet over the interpretation of the brand license agreement with easyGroup, last month warned he could terminate the license to the brand if it does not bring its on-time performance “in line with the highest standards in the industry” within 90 days.

McCall said Monday the company “put a mitigation plan in place in response to these recent issues to minimize the future impact to our passengers and staff.” This includes wet-leasing an additional aircraft during the busy summer period at a cost of £15 million.

In an interim third-quarter statement, easyJet said total revenue per seat increased from the year-ago period by 3.5% to £53.23 with passenger revenue per seat up 4.5% to £43.27 and ancillary revenue including checked baggage down 0.4% to £9.95.

Seats flown grew by 1.7%. Load factor increased by 1.4 points to 86.1%. It put the total profit impact of the volcano ash disruptions at £65 million, of which £28 million is in customer compensation relating to EU passenger rights regulations. It stated that losses would have been “restricted to £20 million if more appropriate ash-related flight restrictions had been in place” (ATW Daily News, May 12).

Forward bookings are in line with the prior year, it said, and “with 64% of the fourth-quarter seats now sold, the company expects to make a pre-tax profit for the year of between £100 million and £150 million at current exchange rates and fuel prices.”