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(Sharecast News) - Budget airline easyJet said it expected to beat full-year profit expectations as it narrowed losses in the first quarter and forward bookings into the summer surged.
The carrier on Wednesday said pre-tax losses for the three months to December 31 came in at £133m against a loss of £213m when Covid travel restrictions were in force.
"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 2023," the company said in a trading statement.
EasyJet has forecast an annual profit of £126m. The company hailed a return of the traditional January booking boom as it hitting record numbers on several days, with customers booking flights and package holidays into 2023.
The carrier said it continued to see strong demand for travel in the UK, while its easyJet holidays were already 60% sold for this summer, adding that easyJet holidays remained the fastest-growing major holiday company in the UK, with a 161% year-on-year increase in customer numbers.
"This strong booking performance, aided by the airline's step changed revenue capability, has driven an £80m year on year boost in the first quarter with continued momentum as customers prioritise spending on holidays for the year ahead," said chief executive Johan Lundgren.
He added that the company's holiday division was upgrading growth plans for the year given the strong demand.
"In summary, we expect to see our winter loss reduce significantly over the first half compared to last year. This will set us firmly on the path to delivering a full year profit, where we anticipate beating the current market expectation enabling us to create value for customers, investors and the economies we serve."
AJ Bell investment director Russ Mould said if Lundgren's profit forecast proved accurate, easyJet will be in the black on an annual basis for the first time since the financial year that ended in September 2019, "although from an investor's perspective, there is still a lot of work to be done as the shares (and annual profits) actually peaked way back in 2015".
"The pandemic presented easyJet with a terrible challenge and the firm has done well to come out of the viral outbreak and lockdowns in the condition it is in, especially after three years of trading losses. But the share price had been losing altitude for some time before then and it peaked in 2015 (when profits did the same, perhaps not coincidentally).
"Over the past decade, easyJet's shares have lost more than a third of their value, while the S&P Global 1200 Airlines index has advanced by 80%."
Reporting by Frank Prenesti for Sharecast.com
