Posted on: 27 January 2016 by Ross McSweeny
easyJet has reported a total revenue of £930 million for the first quarter of the 2016 financial year (1Q16), a 0.1% decrease from 1Q15, which the airline attributes to revenue generated by increased passenger volumes and a higher load factor being offset by a reduced revenue per seat and negative foreign exchange movements of £32 million.
The number of passengers carried during the quarter increased by 8.1% year-over-year to 16.1 million against a capacity growth of 7.3% to 17.8 million seats, resulting in a load factor increase of 0.6 percentage points to 90.3%. The capacity growth focused on easyJet’s newer network bases in Amsterdam, Hamburg and Porto as well as on strengthening key markets in the UK & Switzerland.
Cost per seat decreased by 3.7% during 1Q16 at constant currency following the acceleration of delivery on cost improvement plans, as well as the benefit of a low fuel price. However, strong revenue per seat performance in October was offset by the impact of the events in Egypt and Paris, resulting in lower demand and yield in November and December, with revenue per seat falling from £56.16 in 1Q15 by 6.9% to £52.28 in 1Q16.
Nonetheless, business passenger growth reached 6.5% during the quarter, meaning easyJet is on track to meet its 25% growth target over the next three years; revenue from bookings on mobile devices grew 50% year-over-year; and non-seat revenue increased by 12.7% per seat at constant currency across the respective periods. The airline also delivered £16 million of sustainable savings in the quarter from its Lean cost programme.
“The easyJet customer-centric strategy of giving passengers low fares to primary airports continues to be executed well,” commented Carolyn McCall, easyJet’s CEO. “This year we will consolidate that with a relentless focus on cost reduction which is already delivering. This will ensure that easyJet continues to win and continues to grow revenue, profit and dividends.”
Elsewhere, at the beginning of January 2016, easyJet secured credit ratings from Moodys (Baa1 Stable)
and Standard & Poors (BBB+ Stable).
The airline has hedged forward, on a rolling basis, between 65% and 85% of the next 12 months’ anticipated fuel and currency requirements and between 45% and 65% of the following 12 months’ anticipated requirements.
Taking advantage of the low fuel price environment, easyJet plans to grow capacity, measured in seats flown, by around 8% for the half year and by around 7% for the full year before the effects of disruption. The board expects profit before tax for the year to 30 September 2016 to remain in line with market expectations.