EasyJet has sold 1.5 million more seats for the summer peak compared with this time last year as its package holiday arm saw a jump in quarterly profits.
EasyJet holidays “continues to perform strongly”, growing pre-tax profits by 49% to £73 million with passenger growth of 33% in the three months to June 30.
The in-house tour operation is now projected to deliver a 48% year-on-year rise in annual profits to £180 million.
EasyJet said profits in its third quarter improved by £33 million to £236 million year-on-year as demand for its “primary airport network” continues to grow.
Overall revenue increased by 11% to £2.6 billion, mainly due to the increase in passengers, growth in ancillary revenue per seat and the continued growth of easyJet holidays, the airline disclosed in a quarterly trading update.
This comes as part of expected annual capacity of 100 million seats.
The airline saw carryings rise 8% year-on-year in the last quarter at 25.3 million from 23.4 million, leading to a 16% rise in profits.
Costs per seat excluding fuel in the quarter increased 1% as disruption costs were “much improved” year-on-year with a 33% reduction in events, offset by a 1% increase in average sector length as the proportion of longer leisure routes increased.
Bookings for the July-September quarter “continue to build” with 69% sold – up one percentage point year-on-year with 7% more capacity on sale, despite the airline citing a “challenging European air traffic control environment”.
Rival Ryanair warned on Monday that fares for its key summer months would be “materially lower” than last year as it reported a fall in first quarter profits.
EasyJet chief executive Johan Lundgren said: “Our strong performance in the quarter has been driven by more customers choosing EasyJet for our unrivalled network of destinations and value for money.
“This result was achieved despite Easter falling into March this year, demonstrating the continued importance of travel and this means we remain on track to deliver another record-breaking summer, taking us a step closer to our medium term targets.”
Commenting on the trading update, Julie Palmer, partner at restructuring firm Begbies Traynor, said: “The aviation industry can breathe can a sigh of relief, with this morning’s update from EasyJet providing a strong counter to Ryanair’s disappointing results and proving it is not all doom and gloom for the sector.
“Reporting a solid rise in profits today, the benefits of EasyJet’s maturing routes are starting to come through and one can see why the airline continues to produce strong interest among investors following its return to the FTSE 100 earlier this year.
“Performance in easyJet holidays is a standout – that this side of its business is seeing such a marked surge in customer growth and revenues is impressive amidst an increasingly discerning customer base.
“What is most reassuring though is the expectation that Britain’s biggest budget airline is on track to deliver a record-breaking summer; and that’s despite signs of the travel boom waning and a holiday season that is being blighted by strikes and air-traffic control mishaps yet again.
“With a very mixed picture emerging from the wider sector, EasyJet will have to work very hard to allay concerns about depressed ticket prices over the coming months, but it certainly appears to be better placed than most to withstand the current headwinds”.