LONDON (Alliance News) - EasyJet PLC Thursday said raised its profit guidance for the first half of its financial year thanks mainly to favourable exchange rate movements, with raised revenue per seat guidance offset by an increase in its cost per seat expectation as it was forced to do more de-icing and due to disruptions.
The low-cost airline said it now expects to report between a pretax loss of GBP5 million and a pretax profit of GBP10 million for the six months to end-March, compared with the forecast for a loss of between GBP10 million and GBP30 million it gave in January. This is mainly because it now expects a GBP20 million boost from favourable exchange rate movements, compared with the GBP10 million favourable impact it had previously expected.
Airlines typically make little or no money over the winter months when there are fewer travellers and costs are higher because of the need to deal with weather disruption and de-icing. They make most of their money over the summer months.
EasyJet also raised its revenue per seat growth guidance for the half, excluding fuel, saying it now expects a 2.5% increase rather than the 2.0% increase it had expected in January. However, this will be offset by a rise in cost per seat of up to 3.0%, from the 2.5% increase it previously predicted.
It also now expects its unit fuel bill for the half to be favourable by GBP35 million, at the top end of the GBP30 million to GBP35 million guidance it gave in January.
"EasyJet has had a good first half of the year and second half bookings are in line with last year. However, further volatility around currency rates and the oil price is likely to continue into the second half," it said.
It is still expecting an adverse GBP20 million hit from currency movements for the whole of its financial year. Its full-year capacity growth is still expected to be 5.0%, even though the first-half guidance was raised to a 3.7% increase from 3.5%. Full year cost per seat is now expected to rise by up to 2.5%, from its previous guidance of a 2.0% increase.
Easyjet is still expecting the impact of exchange rate movements to be a GBP10 million hit for the year as a whole, the same as its previous guidance, while the full-year unit fuel bill is expected to be favourable by between GBP90 million and GBP120 million, narrowed from its previous guidance of between GBP90 million and GBP130 million.
It is 82% hedged on its fuel requirement for the second half of the current financial year at an average of USD908 a tonne, 86% hedged for the year as a whole at an average of USD929 a tonne, and 71% hedged for the next financial year as a whole at an average of USD869 a tonne.
The low-cost carrier will publish its interim results on May 12.
By Steve McGrath; stevemcgrath@alliancenews.com; @stevemcgrath1
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easyJet (EZJ)
