EasyJet’s summer 2019 bookings are slightly ahead of last year’s, despite uncertainty over the effect Brexit will have on air transport, as the UK LCC reported a rise in profit for the year ended Sept. 30.
In addition, easyJet announced an order for 17 more Airbus A320neos, bringing the airline’s total neo order to 147, including 30 A321neos. The aircraft are configured with 186 seats in a single-class configuration and are powered by CFM LEAP engines. The LCC already operates 316 A320 family aircraft, including 17 A320neos and three A321neos.
Headline profit before tax for the financial year rose 41% to £578 million ($742 million) and 69% to £690 million, excluding the impact of operations at Berlin Tegel Airport, easyJet reported Nov. 20.
EasyJet acquired the Tegel operations of bankrupt airberlin in 2017, inheriting an inefficient schedule that has had an impact on the rest of the company.
Total profit after tax was up 17% at £358 million.
The carrier’s revenue grew 16.8% to £5.9 billion, while revenue per seat was up 6.4% to £61.94, although excluding Tegel operations the growth would have been 8.3%.
Looking ahead, easyJet said forward bookings for the first half of next year were “solid” at 50%, with capacity expected to grow around 15% in the first half and about 10% for the full year.
But revenue per seat at constant currency for the first half is expected to be down by low- to mid-single digits on a like-for-like basis, in line with previous guidance, including the effects of annualization of one-off revenue benefits from the 2018 financial year, dilution from Berlin and the effect of Easter moving into the second half.
On a like-for-like accounting basis, total headline cost per seat (excluding fuel) at constant currency assuming normal levels of disruption is expected to be flat for the 12 months to Sept. 30, 2019, the airline said.
The airline continues to prepare for Brexit—the UK’s upcoming withdrawal from the European Union (EU)—operating via airlines in the UK, Switzerland and Austria to enable ongoing flights in Europe, and is close to achieving majority European Economic Area ownership, currently at 47%.
Passenger numbers for the financial year grew 10.2% to 88.5 million, with a load factor of 92.9%, compared with 92.6% the previous year, helped by easyJet’s expansion into Tegel, the airline said.
The passenger numbers and load factors were records for the airline, CEO Johan Lundgren said.
“The integration of new operations at Tegel has also progressed well and our brand consideration in Berlin has grown strongly,” he said in a statement. “Our strategy continues to ensure we are well positioned for the future. We have made considerable progress on our new initiatives in holidays, business and loyalty, which will enable us to grow profitably. While disruption continues to be a major challenge for the industry, we are investing in resilience to help to mitigate the impact on our customers.”
Headline costs per seat, excluding fuel, rose 5.3% to £43.43 in the financial year, primarily because of expansion into Tegel, higher levels of disruption and crew cost inflation, easyJet said.
Total costs per seat, taking into account non-headline items, including £40 million in costs at Tegel and £65 million in IT development costs, came to £57.26, up from £53.78 the previous year.
The airline said fuel was expected to amount to a £50-£100 million headwind in the next financial year, based on current prices, adding that a solid hedging position would provide a buffer against rising fuel costs over the next 18 months.
“Full year 2018 was a strong year for easyJet,” Bernstein analyst Daniel Roeska wrote in a research note. “However, the outlook for full year 2019 continues to look challenging with increasing fuel headwinds, flat ex-fuel unit costs and pressure on first half yields from high sector capacity growth rates as well as accounting and one-off impacts”…
