easyJet revises profit expectation upwards

easyJet has announced a trading update for the twelve months ended 30 September 2012, the end of its financial year, in which it predicts its full year pre-tax profit (PBT) to be between £310 million and £320 million rather than the previously advised range of £280 million to £300 million.

easyJet’s said its commercial and operational performance continued to be robust across the network. Following the end of the Olympic games, demand from London increased towards the upper end of expectations with the late market and beach routes performing particularly well. As a consequence, the airline noted, revenue per seat at constant currency is likely to increase between 5% and 5.5% for the six months to 30 September 2012 compared with the previous guidance of “low to mid-single digits”.

In the 25 July IMS easyJet highlighted the operational challenges it faced from the Olympics and the steps it had taken to minimise disruption from both the games and the threat of industrial action in Europe. However, there were very low levels of disruption through this critical summer period ensuring improved on-time performance and continued high levels of customer service. Second half costs are thus likely to be in line with the guidance previously issued with a 1.5% to 2% increase in cost per seat excluding fuel at constant currency.

Owing to the timing of the significant year on year change in the euro-to-sterling exchange rate there will be a material difference between constant currency and reported growth rates for both revenue and costs for the second half. Reported revenue per seat growth is likely to be between 2% to 3%, whilst reported cost per seat excluding fuel will show a 2% to 3.5% reduction in cost.

The result of easyJet’s better than expected late summer revenue performance and the benign operating environment, led to the revised pre-tax profit expectation.

Commenting on the pre-close statement, Carolyn McCall, easyJet’s chief executive, remarked, “easyJet has had a strong summer performance, which has enabled us to deliver another good year of returns and growth for our shareholders. easyJet will deliver higher returns and its highest ever pre-tax profit for the financial year ending 30 September 2012, despite absorbing an additional £230 million in fuel costs this year.

“We also continue to deliver for our customers with the best on-time performance in Europe this summer, low fares to convenient airports across Europe and our recently announced launch of allocated seating across the easyJet network,” McCall added.

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