EasyJet set to unveil benefits of BA and Ryanair strikes
EasyJet has managed to enjoy the peak summer period more than its rivals this year, with strikes hitting British Airways and Ryanair.
But shareholders in the orange airline will be hoping to hear more from chief executive Johan Lundgren on how the Swede, who joined easyJet two years ago, is improving the company from the inside.
They will get their chance on Tuesday when the business unveils its full-year results.
Analysts have already been given heavy guidance from the firm that pre-tax profits will hit between £420 million and £430 million for the year – the higher end of expectations – with passenger numbers up 8.6% to 96 million due to an increase in capacity.
However, as Michael Hewson, chief market analyst at CMC Markets UK, explained: “Despite this optimism, investors seemed less impressed with the share price hitting an air pocket, and falling sharply.
“This proved to be a temporary aberration with the shares quickly finding support, with the shares up over 40% since the lows seen in June.
“Easyjet has no doubt made gains due to increased demand as a result of the strikes at British Airways and Ryanair, with total revenue per seat for the second half rising by 0.8%, an outperformance from previous guidance, though on the year will still show a decline of 2.7%.”
With easyJet already providing significant guidance to the City, most can expect the focus of attention will be on any information for the next financial year.
Russ Mould, of AJ Bell, pointed out that the key topics of interest will be capacity growth, bookings, load factor, costs, new routes to Berlin Tegel airport and the recently acquired Thomas Cook slots at Gatwick.
Mr Mould added: “Put all of that together and the current consensus forecast is for an increase in pre-tax profits to around £460 million in the year just begun.”
There is also talk of easyJet moving into the package holiday business, with hoteliers across Europe desperate to fill rooms previously earmarked for Thomas Cook customers.
As for Mr Lundgren – expect him to talk about the changes to the way data is used, improvements in customer service and how the industry is addressing the climate change debate.