EasyJet holidays is more than 60% sold for the summer as demand outstrips previous projections
The budget carrier’s tour operating arm reported strong demand, ahead of previously forecast year-on-year growth of 30%, and is upgrading “ambitious” growth plans.
“With the holidays business not constrained and considering current levels of demand, we now expect to see growth of circa 50% on full year 2022,” the airline said in a trading update for the three months to December 31.
“EasyJet holidays remains the UK’s fastest growing major holiday company, with a 161% increase year-on-year in customers as demand for travel in the UK remains strong.”
The airline and tour operation reported record January revenue bookings days.
EasyJet reported a reduced headline pre-tax loss of £133 million for the quarter, down from £213 million in the same period a year earlier.
Passenger numbers for the three months rose to 17.5 million from 11.9 million with ticket yield up by 21%.
The airline expects traditional winter half year losses to be “significantly better” than the previous year.
EasyJet said: “Whilst we remain mindful of the uncertain macroeconomic outlook across the globe, based on current high levels of demand and strong bookings, easyJet anticipates beating the current market profit expectations for full year 2023.
“Demand for our network is strong demonstrated through record turn of year bookings.
“EasyJet holidays will continue to see customer growth through the [current] quarter, alongside investment into marketing and advertising as part of the turn of year sale campaign.”
Easter is currently trading “very well” with ticket yields up 24% over the equivalent pre-pandemic 2019 levels with a later booking window.
“With strong UK demand, easyJet holidays is now over 60% sold for this summer, based on the previously guided 30% growth year-on-year.”
EasyJet’s financial performance for its first quarter was ahead of expectations as yields strengthened, with revenue per seat increasing 36% year-on-year.
Airline ancillary revenue at £20.12 per seat also increased by 36%.
Chief executive Johan Lundgren said: “We have seen strong and sustained demand for travel over the first quarter, carrying almost 50% more customers compared with last year.
“Many returned to make bookings during the traditional turn of year sale where we filled five aircraft every minute in the peak hours, which culminated in three record-breaking weekends for sales revenue this month.
“This strong booking performance, aided by the airline’s step changed revenue capability, has driven an £80 million year-on-year boost in the first quarter with continued momentum as customers prioritise spending on holidays for the year ahead.
“EasyJet holidays, the fastest growing holidays company in the UK, is upgrading its ambitious growth plans for the year given the strong demand.
“In summary, we expect to see our winter loss reduce significantly over the first half compared to last year.
“This will set us firmly on the path to delivering a full year profit, where we anticipate beating the current market expectation enabling us to create value for customers, investors and the economies we serve.”
- Commenting on easyJet’s trading update, Ruth Griffin, retail and leisure partner at sector-focused law firm Gowling WLG, said: “Like other airlines, easyJet has experienced turbulent times recently with soaring fuel costs, rising inflation and the war in Ukraine, as well as the cost of living crisis.
“Shareholders will be hoping new cost control measures and a strong balance book will keep the company steady until this summer where there is growing demand for holidays abroad.
“The airline is looking to the future though, having announced it has successfully trialled running an aircraft engine on hydrogen as it aims to decarbonise its fleet and offer a sustainable fuel alternative for air travel. This will prove invaluable in the years ahead as the pressure to reach net zero by 2050 gathers further pace.”