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EasyJet Sees Return To Profit, Strong Bookings For 2023

By Dave Simpson

EasyJet on Wednesday 25 January said it expected to beat current market expectations for 2023 based on the strength of bookings into summer and was set to deliver a return to full-year profit as the sector recovers from pandemic restrictions.

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Analysts have said airlines can expect a strong booking season as many hope that despite a recession in Britain, travellers won't sacrifice their holidays. Low-cost airlines in particular are set to benefit as consumers have less money to spend amidst double-digit inflation.

"Whilst we remain mindful of the uncertain macroeconomic outlook across the globe, based on current high levels of demand and strong bookings, easyJet anticipates beating the current market profit expectations for full-year 2023," the company said in a statement.

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The British airline reported a headline loss before tax of £133 million for the quarter to end-December, and said it expected its loss before tax for the first half to be significantly better than in the first half of 2022.

EasyJet Holidays also upgraded expectations from 30% customer growth to around 50% year-on-year and said the airline had almost 50% more customers than last year.

"This strong booking performance, aided by the airline's step changed revenue capability, has driven an 80 million pound year-on-year boost in the first quarter with continued momentum as customers prioritise spending on holidays for the year ahead," chief executive Johan Lundgren said in a statement.

Shares in easyJet, which made a loss before tax of £178 million in its last year, rose 10% to a seven-month high of 516 pence, although still well below the pre-pandemic level of around 1,300 pence.

Analysts had expected it to make a pretax profit of £126 million this year, according to a company-supplied consensus.

WizzAir was up 7.8% while IAG rose by 2.8%.

Lundgren said easyJet saw record-breaking sales revenue in recent weekends as customers booked holidays in places like the Greek islands and Spain.

Staff recruitment for the busy summer season was also well on its way, he told reporters, in a bid to prevent the disruption that marred the European travel sector last summer.

"We have recruited almost all of the need we have for the summer programme but we will make sure we will have further resilience in our crew," he said on a call.

Ryanair, Europe's biggest airline and a low-cost competitor for easyJet, said earlier this month it was expecting a very strong summer season with a reasonable prospect of average European short-haul air fares rising by a high single digit percentage.

"Airline reporting season starts optimistically, and we expect easyJet to be the first of several strong prints. Earlier guidance looks overly cautious and numbers will need to come up," Bernstein analyst Alex Irving said in a research note.

London Stocks Rise As EasyJet Flies High After Results

The above news was followed by news that UK shares rose on Wednesday 25 January, as upbeat earnings from airline EasyJet and insurer Aviva helped outweigh worries about Britain's gloomy economic outlook and further interest rate rises.

The blue-chip FTSE 100 .FTSE edged up 0.1% and the midcap FTSE 250 index .FTMC climbed 0.5%, bucking a cautious mood across European markets.

Airline stocks got a lift after EasyJet said it expected to beat market expectations for 2023 on strong bookings into summer.

"easyJet has shown how a post-pandemic recovery is done," Hargreaves Lansdown equity analyst Sophie Lund-Yates wrote in a note.

"Its superior proposition means its planes are at the right airports, with the right routes, to capture demand as holidaymakers return to the skies in force."

EasyJet jumped 10.4%, set for its best day in almost a year, while Ryanair added 3.7% and British Airways parent IAG rose 2.3% to hit its highest since January 2022.

UK's main equity indexes kicked off 2023 on an upbeat note, with the FTSE 100 flirting with record levels as signs of moderation in inflation and expectations of smaller interest rate hikes from the Federal Reserve boosted global sentiment.

Data showed Britain's manufacturers unexpectedly reduced their prices in December, in a welcome move for the Bank of England which is weighing how much higher it needs to take interest rates.

The Times newspaper reported Britain's official economic forecaster has told the government that it overestimated the prospects for medium-term growth and that it intends to revise down its outlook.

Aviva climbed 2.5% after the insurer maintained its dividend guidance and capital returns outlook.

Ascential Plc jumped 23.6% to the top of the midcap index after the events and analytics firm forecast full-year EBITDA at the top of end of market expectations.

JD Wetherspoon slipped 1.5% after the pub operator said it was "cautiously optimistic" about this financial year.

Read More: Belfast International Airport Gets New EasyJet Service To Antalya

News by Reuters, edited by Hospitality Ireland. Click subscribe to sign up for the Hospitality Ireland print edition.

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