easyJet revenue down in third quarter

easyJet’s figures for the three months ended 30 June 2016 (3Q16) show a passenger increase of 5.8% year-over-year to 20.2 million, but a 2.6% drop in total revenue.Available seat kilometres increased from 23,517 billion in 3Q15 by 3.6% to 24,366 billion in 3Q16, while revenue passenger kilometres grew by 4.6% from 21,707 billion to 22,701 billion, resulting in a load factor growth of 0.3 percentage points to 92%.Business passengers grew by 9% during the quarter against a 4% increase in business capacity, helped by 25 new corporate agreements and a higher proportion of business bookings through the mobile channel.Despite non-seat revenue growing by 12.3% from £19 million in 3Q15 to £22 million in 3Q16, easyJet’s seat revenue declined by 2.8% from £1,209 million to £1,174 million, meaning the carrier’s total revenue was also 2.6% down from £1,228 million to £1,196 million.Specifically, revenue per seat at constant currency declined by 8.3% to £54.17 due to a high level of disruption, over-capacity in the Western Mediterranean and the financial impact of UK’s referendum decision to leave the European Union (also known as Brexit). Cost per seat excluding fuel at constant currency remained practically the same, increasing by 0.1% from £36.08 in 3Q15 to £36.09 in 3Q16.Due to the aforementioned disruption, the airline’s on-time performance decreased from 79% to 74% year-over-year.During 3Q16, easyJet took delivery of six Airbus A320s. As of 30 June 2016, its fleet comprised of 253 aircraft consisting of 109 A320s – including four 186-seat variants – and 144 A319s. easyJet is retaining the flexibility to adjust its capacity plans through utilisation and lease exits on its A319 fleet.“The economic and operating environment has been difficult in the third quarter due to a number of factors including air traffic control strikes and other industrial action, runway closures at London Gatwick and severe weather,” noted Carolyn McCall, easyJet’s CEO. “These factors, combined with industry capacity growth in short-haul, continue to have an impact on industry yields at a peak time of year. More recently currency volatility as a result of the UK’s referendum decision to leave the EU as well as the recent events in Turkey and Nice continue to impact consumer confidence.“Despite this, easyJet carried more passengers and achieved higher load factors during the third quarter as easyJet’s brand continued to resonate strongly across Europe,” McCall continued. “easyJet is strongly controlling costs and driving continued improvement in operational and customer delivery. We are focussed on the opportunities that are inevitable from a tougher environment.”Following the EU referendum outcome, easyJet says it has a well-developed contingency plan to obtain an EU Airline Operator Certificate (AOC) in the event the UK Government negotiation does not achieve the desired outcome of a continuation of a liberalised and deregulated aviation market.Elsewhere, although easyJet estimates its unit fuel bill for the second half of the financial year is likely to decrease by between £75 million and £85 million compared with the six months to 30 September 2015, it claims exchange rate movements are likely to have around a £45 million adverse impact across the respective periods.The carrier says approximately 65% of expected bookings for the fourth quarter of 2016 (4Q16) have now been secured, with booked average revenue per seat for the quarter declining by around 7.5% at constant currency. Capacity for 4Q16 is expected to grow by 6%.

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