EasyJet Upgrades Profit As Passengers Buy Extras

July 7, 2006
British no-frills airline easyJet said it expected sales of ancillary items such as drinks, online insurance, hotels and car hire to rise by 30 percent in 2006 as it pulled in 3-4 percent better revenues per seat.

EasyJet, which carried nearly 2.59 million passengers last month, up 15.6 percent from a year earlier, said revenue-per-seat was 17 percent higher from April through June than in the same period in 2005, helped by the timing of the busy Easter holiday break.

"The improved revenue outlook leads us to increase our profit guidance," easyJet Chief Executive Andy Harrison said in a statement.

"Previously, our profit guidance for the full year was growth of 10 percent to 15 percent... We now expect pretax profit growth for the full year to be in the range of 40 percent to 50 percent." The London Luton Airport-based company, Europe's second-largest budget carrier after Ryanair, said it was sub-chartering a limited number of aircraft on a short-term basis to support its summer schedules and that this would add to second-half costs.

But although it said it expected that unit costs excluding fuel would fall by around 3 percent in 2006 compared with 2005, analysts said there was still concern about high fuel costs.

EasyJet's fuel bill rose 68 percent in the year to end-March to GBP166 million (USD$307.3 million).

Launched by entrepreneur Stelios Haji-Ioannou in 1995, easyJet floated in London in 2000, bought the low-cost carrier Go in 2002 and has since grown rapidly, with around 170 planes expected in the air by 2008.

EasyJet said its load factor was 87.6 percent in June, up from 85.6 percent previously.

The firm made a pretax loss of GBP40 million (USD$74 million) for the six months to the end of March, compared with a GBP22 million (USD$40.7 million) loss previously after its fuel bill leapt.