When you’re not glued to a Bloomberg terminal, stockmarket reactions can sometimes seem a little strange. Take easyJet results: when the budget airline reported its best first half results in 13 years in May shares tanked. Then today it announced third quarter sales had hit a spot of turbulence and investors cheered.
It’s all about expectations and this time things weren’t as bad as the markets had anticipated. Revenue per seat, one of the airline industry’s favoured metrics, fell 2.8% on a constant currency basis in the quarter to June 30, less than the 4% drop forecast in May when it warned sales were under pressure from French air traffic control strikes.
Total revenue also slipped 1% to £1.22bn, hit by the industrial action and a fire at Rome’s Fiumicino Airport. Together those issues caused 1,364 of the 1,463 cancelled flights in the quarter, well above the 648 cancelled the previous year.
But it wasn’t all bad. The airline, which has been turning down the tango in its branding of late in a bid to attract more business travellers, grew its capacity 4.7% to 20.8 million seats and passenger numbers 6.2% to 19.1 million.
That took the all important load factor (how full a plane is) up 1.3% to 91.7%. It also forecast full-year pre-tax profits of £620m-£660m, compared to £580m last year.
‘Pretty good,’ said investors, sending shares up more than 4% to 1,739p in mid-morning trading. That’s still some way off their all-time high of 1,915p recorded in April, but means the shares haven’t fallen overall this year.
But it’s not clear skies ahead for chief executive Carolyn McCall and her team, with 2,000 cabin crew currently voting on whether to go on strike at the end of the crucial summer season. Add to that the impact of the Tunisian terror attacks and continued doubts over holidaying in cash-strapped Greece and there’s plenty of turbulence still to come this year – and not just in the stockmarket.