EasyJet says the impact on travel demand from conflict in the Middle East means it does not expect to improve on first-quarter losses covering the three months ending December 2023, but is projecting a “positive outlook” for its full financial year.
The UK budget carrier has today confirmed a headline pre-tax profit of £455 million ($574 million) for the year ended 30 September 2023, within the £440-460 million profit range it guided for last month.
EasyJet’s first two financial quarters – covering the winter season – are traditionally loss-making. While the airline is working on initiatives to cut losses during this period, it says its early winter results will be impacted by the the Israel-Palestine conflict. EasyJet flights to Israel and Jordan have both been suspended, which, together with its Egypt services, account for 4% of its capacity.
”Additionally there was a broader impact on near-term flight searches and bookings across the industry, though this seems to be coming back with a recent improvement in trading,” it says.
”Accordingly, despite positive underlying strength, EasyJet does not currently expect its Q1 loss to improve year on year.”
EasyJet posted a headline pre-tax loss of £133 million in the first quarter of its 2023 financial year.
While cautioning on the first quarter, EasyJet takes a more positive view on the year ahead. “The 2024 financial year has begun positively with strong year-on-year profit growth in October and revenue per seat on early bookings for Q2-Q4 pleasingly ahead of last year. There’s also strong growth in EasyJet holidays’ bookings for all periods on sale, continuing the upward trend,” it says
”The present booking strength for summer 2024, coupled with supply constraints in Europe, provide a positive outlook for the year as a whole.
”Consequently, EasyJet aims for continued progress towards our medium-term profitability ambitions.” it says. The airline last month adopted a mid-term target of delivering annual headline pre-tax profits of more than £1 billion.
EasyJet’s full-year headline profit of £455 million for the year ended 30 September marked a return to the black for the first time since the pandemic, having posted a £178 million loss for the previous year. The return to proft was achieved on revenues up 42% to £8.17 billion.
