- Summary
- Companies
- Shares up as much as 4.2% after FY2024 results
- Growth on longer leisure routes expected for next year
- Incoming CEO Kenton Jarvis takes over from Johan Lundgren in new year
LONDON, Nov 27 (Reuters) - EasyJet
(EZJ.L), opens new tabis looking to fly more passengers in its 2025 financial year, helping the budget airline's shares to hit their highest level in nearly eight months.
The company on Wednesday forecast a 3% increase in capacity in its next financial year after reporting a strong increase in annual operating profit partly due to a recovery from disruptions arising from the Middle East conflict.
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"The airline will continue to grow, particularly on popular longer leisure routes like North Africa and the Canaries and we plan to take 25% more customers away on package holidays," CEO-designate Kenton Jarvis, who is replacing Johan Lundgren next year, said in a statement.
EasyJet shares rose as much as 4.2% to their highest level since early April. They were up 1.3% at 1043 GMT.
Rival Ryanair
(RYA.I), opens new tabearlier this month reported a big drop in after-tax profit in the first half of its financial year and also faced a fall in ticket fares in the summer, although those prices have since normalised.
EasyJet has dodged many of the issues that have plagued the airline industry thanks to its Airbus
(AIR.PA), opens new tabfleet equipped with CFM engines. It has also avoided the challenges surrounding U.S. plane manufacturer Boeing
(BA.N), opens new taband engine maker Pratt and Whitney, owned by RTX
(RTX.N), opens new tab.
Other European airlines, such as Lufthansa
(LHAG.DE), opens new taband Air France-KLM
(AIRF.PA), opens new tab, have faced some issues with limited plane deliveries, engine challenges, spiralling labour costs, flattening ticket prices and moderating demand.
EasyJet reported an operating profit of 597 million pounds ($750.5 million) for the year ended Sept. 30, up a quarter from a year earlier but lower than the 625.6 million pounds expected by analysts, according to an LSEG-compiled poll.
An EasyJet Airbus A321neo aircraft is parked at Gatwick Airport before a special flight to Farnborough International Airshow in Farnborough, Britain, July 18, 2018. REUTERS/Sarah Young/File Photo Purchase Licensing Rights, opens new tab
Outgoing CEO Johan Lundgren said that results were a "significant step towards our goal of sustainably generating over one billion pounds ($1.26 billion) annual profit before tax".
The airline has faced slightly higher fuel costs and some disruption from the Middle East, but analysts and investors say lower oil prices and a new network focus could help easyJet next year.
They are optimistic about the company's ability to meet its expectations for the coming year, with strong demand set to continue and more interest in easyJet's lucrative package holiday business.
"The upcoming winter profitability should meaningfully improve on last year – largely due to easyJet increasing flying to more distant winter sun destinations, for which customers are willing to pay higher prices," a budget airline investor told Reuters.
For the current fiscal year ending September 2025, easyJet expects capacity of about 103 million seats and holiday customers to grow by about 25% from last year.
Alex Irving, an analyst at Bernstein, said this strategy could also "possibly be targeting a greater share of 'sun and sand' destinations in the Eastern Mediterranean, following the success of the holidays business that continues to go from strength to strength."
Analysts said lower oil prices will also help to ease easyJet's cost pressures next year.
($1 = 0.7947 pounds)
Reporting by Joanna Plucinska in London and Yadarisa Shabong in Bengaluru; Editing by Sonia Cheema, Louise Heavens, Alexandra Hudson and Jane Merriman
Our Standards: The Thomson Reuters Trust Principles., opens new tab
Joanna Plucinska
Thomson Reuters
Joanna reports on airlines and travel in Europe, including tourism trends, sustainability and policy. She was previously based in Warsaw, where she covered politics and general news. She wrote stories on everything from Chinese spies to migrants stranded in forests along the Belarusian border. In 2022, she spent six weeks covering the war in Ukraine, with a focus on the evacuation of children, war reparations and evidence that Russian commanders knew of sexual violence by their troops. Joanna graduated from the Columbia Journalism School in 2014. Before joining Reuters, she worked in Hong Kong for TIME and later in Brussels reporting on EU tech policy for POLITICO Europe.
