Easyjet raises profit guidance

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EasyJetLow-cost airline easyJet has enjoyed a better-than-expected summer after an advertising campaign boosted sales and it benefited from cheaper fuel.

The Luton-based operator, which is Europe's fourth-biggest short-haul carrier, said pre-tax profits would be between £280 million and £300 million in the year to September 30, up from previous guidance of £272 million and last year's £248 million.

The group said revenue per seat was up 5% at £57.58, driven by the success of its "Europe by easyJet" adverts, which feature images from award winning photographer Elaine Constantine and music by Liverpudlian indie band The Wombats.

The improved performance combined with a drop in the price of fuel, which had spiked in March amid increasing tensions between Iran and the West.

The record rainfall in June prompted Britons to escape to sunnier destinations abroad, easyJet said, with Faro in Portugal and Malaga and Alicante in Spain the most popular destinations. Revenues per seat were boosted by strong in-flight sales of bacon sandwiches, sparkling wine and mascara, the airline added.

EasyJet said total revenues increased by 10.5% to £1 billion as seats flown grew by 7.5% to 17.9 million and passengers carried increased by 11% to 16 million.

The group, which operates 600 routes across 30 countries, said around three quarters of summer seats were now booked, in line with the previous year. Looking ahead, capacity in the fourth quarter is anticipated to grow by 6.5% compared to the prior year, assuming no significant disruption.

In the quarter, easyJet took delivery of 12 A320 family aircraft and returned five A319 aircraft to lessors. The fleet was comprised of 211 easyJet specification aircraft as at June 30.

The carrier had previously stated that it has seen a fall in demand for flights touching London during the Olympics, both from inbound business travellers and outbound leisure travellers, but forward bookings show a recovery once the games have concluded.

The board's volatile relationship with the airline's founder Sir Stelios Haji-Ioannou continued earlier this month after he wrote to shareholders urging them to oust Sir Michael Rake, the airline's chairman. Sir Michael is also deputy chairman of Barclays but recently informed the bank he was not putting himself forward for the position of chairman, after Marcus Agius resigned in the wake of a rate-rigging scandal.

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