EasyJet Quarterly Seat Revenue Rises, Keeps Outlook


British low-cost airline easyJet reported a 0.5 percent rise in first-quarter revenue per seat on Thursday and reiterated its forecast for a 20 percent rise in full-year pretax profit.

The firm also reported a 14.1 percent rise in first-quarter total revenue to 418 million pounds ($820.4 million) and said second-quarter revenue would be ahead of its original expectations due to increased checked bag charges and the stronger euro.

"Whilst revenues will be ahead of previous guidance, this impact is largely offset by an increase in costs denominated in euros, principally airport costs, navigation and European based crew costs," it said in a statement.

EasyJet's outlook contrasts with that of bigger rival Ryanair, which warned on Monday there was a "significant chance" its profits would fall in the 2008/09 business year due to high oil prices, weaker sterling and low consumer confidence.

EasyJet said first-half pretax margins would fall by 2-3 percentage points on increased fuel costs and crew costs running ahead of its original expectations.

Budget airlines, which have increased market share throughout Europe by leveraging their very low cost bases to cut ticket prices, face weakening profitability on high fuel costs.

EasyJet, which reported a 48 percent jump in annual profit in November, expects its growth rate to slow to 20 percent in the year to end-September, while Ryanair cautioned profits could fall by as much as 50 percent.

EasyJet, which saw December-quarter passenger numbers rising by 12.4 percent to 9.1 million, said January passenger numbers grew 7.3 percent.

Load factor, the proportion of available seats sold, fell by 2.9 percentage points to 72 percent in January, although forward bookings for February and March showed an improving trend.

"January traffic data appeared to disappoint, with load factor down," JP Morgan analysts said.

"This is consumer pushback again, but easyJet has already reacted to the initial volume weakness by cutting lead-in fares to restimulate bookings and get back to load factors that give pricing power."

Shares of easyJet closed 6.4 percent lower.

EasyJet said the impact of GB Airways, which it bought late last year, would be a pretax loss of around 7 million pounds in the first half, due to increased marketing spend.

Analysts expect easyJet to report 238 million pounds in pretax profit on a revenue of 2.2 billion in the year to end-September.