EasyJet today described demand as being “solid” with “robust” forward bookings after March 29 despite consumer and economic uncertainty created by Brexit.
The UK budget carrier’s positive message in a trading statement contrasts sharply with rival Ryanair which issued a second successive profits warning last week.
But easyJet revealed it incurred £10 million in costs due to the drone chaos at Gatwick before Christmas which affected 82,000 of its passengers and led to more than 400 flights being cancelled. The cancellations and lost revenue due to the incident resulted in an additional £5 million impact.
The Christmas quarter to December 31 saw passenger numbers rise by 15.1% to 21.6 million despite the temporary shutdown of Gatwick and late deliveries of A321 aircraft from Airbus.
Total revenue in the three months rose 13.7% year-on-year to £1.3 billion, including a 20% jump in ancillary revenue to £271 million.
The quarterly load factor declined by two percentage points to 89.7% while total revenue per seat decreased by 4.2% at constant currency, described as being in line with expectations.
The airline suffered 764 cancellations in the quarter, down from 1,051 in the same period a year earlier, with the biggest number due to the drone issue at Gatwick.
Capacity is being increased by 10% this year on the back of the performance in the last three months of 2018, with easyJet saying it is “well prepared” for Brexit.
The airline is preparing by registering 130 aircraft in Austria, ensuring it has a pool of spare parts in the EU and transferring crew licences.
“With approximately 40% of forward bookings secured for the second quarter [to March 31], revenue per seat at constant currency for the first half is expected to decrease by mid to high single digits,” easyJet said.
A late Easter this year is expected to result in a £50 million negative impact in the first half of the carrier’s 2018-19 financial year but this is expected to be reversed in the following six months.
Chief executive Johan Lundgren said: “EasyJet has made a good start to the 2019 financial year with robust customer demand and ancillary sales, driving solid revenue generation.
“This was underpinned by good operating and on-time performance across the network, with the exception of the disruption caused by the Gatwick closures due to drone sightings.
“There has been be a one-off cost impact from this incident, but underlying cost progress is in line with expectations.
“I am proud of the way our teams worked around the clock to mitigate the impact of the incident and looked after affected customers.
“Recognition of the easyJet brand continues to grow. We made good progress on our strategic initiatives; holidays, business, loyalty and data during the quarter.”
He added: “For the first half of 2019, booking levels currently remain encouraging despite the lack of certainty around Brexit for our customers.
“Second half bookings continue to be ahead of last year and our expectations for the full year headline profit before tax are broadly in line with current market expectations.”
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