Budget airline Easyjet weathers tough conditions

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A rise in easyJet’s quarterly revenues to £897m failed to inspire the City as the budget airline posted its first trading update since notching up an annual profits increase of 51 per cent.

Shares slipped despite the 7.7 per cent increase in turnover for the three months to the end of December, as one analyst said the figures “did not quite match the great expectations to which investors have become accustomed”.

The number of passengers carried increased by 4.2 per cent to 14.3 million, with business passengers up by 8.9 per cent. Revenue per seat was up by 3.4 per cent as expected to £55.71 - despite tough comparisons with a post-Olympics getaway surge in 2012.

But bookings for the first half are expected to be flat on the year before and pre-tax losses for the six-month period are forecast to increase to between £70m and £90m because of the timing of Easter. The group said tough competition together with restrictions on travel to Egypt had also taken their toll on performance. There were also higher costs from airport charges and maintenance.

But it was helped by the closure of underperforming routes, changes to fees and charges and the performance of allocated seating, as well as improvements to the website and an increase in non-seat revenue by 8p to 88p per passenger.

The group said it had sold 15 per cent of seats for the second half of the financial year, in line with the year before. It was still too early to give guidance on expected profits for the period.

Chief executive Carolyn McCall said: “Easyjet has made a good start to the year. We have delivered revenue per seat growth in the quarter against a challenging competitive environment and the tough comparison with the previous year.”

The airline is to begin operations from a new base at Naples in the spring. New routes from Hamburg and Rome Fiumicino have also recently been announced. Easyjet is also looking to connect more airports in its network and has said it will increase the number of routes to Tel Aviv. Annual profits at the carrier, which flies from Leeds Bradford International Airport, soared by half to £478m for the year to the end of September.