Shankul Bhandare
Just days after Ryanair issued a warning about demand and the need for increased discounting, easyJet reported that its prices remained flat on average compared to last year, with no signs of weakening bookings heading into the summer peak.
Following this news, easyJet’s shares rose by 8%, and other aviation companies also saw gains after widespread losses on Monday related to Ryanair’s performance and outlook.
EasyJet raised its annual profit forecast for its holidays division after reporting a 16% increase in third-quarter group pre-tax profits to £236 million.
Chief Executive Johan Lundgren stated, “We remain on track to deliver another record-breaking summer, taking us a step closer to our medium-term targets.”
Regarding the current market outlook, he added, “Some parts of the network and certain flights may be cheaper than last year, while others might be slightly more expensive. However, on average, the fare environment is very similar to what we saw last year.”
The upbeat tone contrasts with concerns in the sector that high ticket and holiday prices are deterring customers, as budgets remain strained across Europe due to cost of living pressures.
EasyJet reported that its summer flight schedule was 69% booked but did not provide a specific profit forecast, only stating that the outlook was positive.
Ryanair’s stock rose by 2%, while Wizz Air and BA owner IAG saw similar gains.
John Moore, senior investment manager at RBC Brewin Dolphin, commented, “Ryanair’s results earlier in the week cast a shadow over airlines, but easyJet’s performance should provide some reassurance that conditions aren’t necessarily bleak across the entire sector.
“Profits and bookings are on a positive trajectory, and the easyJet Holidays division is making a more significant contribution to the company’s bottom line.
“Concerns about the longevity of the post-COVID travel boom will likely linger over airlines for some time—easyJet is down 15% year to date. However, today’s results show that easyJet is in a better position than many of its peers and should be able to navigate this turbulent period.”
