EasyJet hits turbulence despite sales taking off

'We want more!' say markets, as the orange airline's shares fall after quarterly revenues rose.

by Rachel Savage
Last Updated: 25 Jun 2014

Budget airline easyJet got a sulky response from the stock market this morning despite reporting a 7.7% rise in first quarter revenues, after it warned a late Easter would hit first half revenues.

Europe’s second-largest discount airline posted sales of £897m, as the number of passengers rose 4.2% to 14.3 million. People are literally buying into easyJet’s, ahem, revolutionary policy of being able to choose seats before you board, and it seems especially popular with the business passengers easyJet is so keen to target – their numbers were up 8.9% in the quarter.

However, investors seem to have been hoping for more, as shares were down almost 3% in mid-morning trading. Perhaps traders’ heads were in the clouds about easyJet’s prospects, after it reported a 51% rise in full year pre-tax profits back in November.

Easter’s timing isn’t helping either (those darn shifty religious holidays) – it falls in April this year instead of the end of March, which shunted £25m extra revenue into easyJet’s first half last year. The airline warned that its first half pre-tax loss will be between £70m and £90m, compared to £61m in 2013.

‘We have delivered revenue per seat growth in the quarter against a challenging competitive environment and the tough comparison with the prior year,’ chief exec Carolyn McCall said.

McCall’s salary comparison could be tough this year too if revenue growth doesn’t keep climbing and outspoken owner Stelios has his way – she was awarded a bumper £6.4m in 2013.

However, McCall doesn’t necessarily need to be too concerned about disappointed or difficult investors. After all, rival Ryanair had to issue two profit warnings in two months at the end of last year which, along with easyJet successfully abolishing the pre-boarding scrum, induced sweary boss Michael O’Leary into changing his mind about being nice to customers (shock horror!). All eyes are now on the Irish airline’s third quarter results, out February 3.


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