EasyJet's share price has tanked 4% despite soaring business travel

The budget airline has flown in a smaller first half loss than expected, but the shares have still hit turbulence.

by Rachel Savage
Last Updated: 05 Dec 2014

EasyJet’s shareholders are a tricky bunch to please. The budget airline reported a smaller first half loss than expected, driven by an increase in business passengers. However, investors were still not satisfied, with shares down more than 4% to 1,656p in mid-morning trading.

The company’s pre-tax loss for the six months to 31 March was £53m, compared to £61m last year and the £55-£65m range it forecast back in March. EasyJet usually makes a loss in its winter half, as fewer people fly to sunnier climes.

Business travellers are continuing to make the switch from the ageing dames of the sky (British Airways, Air France et al) to budget airlines, with 8.5% more flying with EasyJet, compared to 4% more passengers overall. Why? Abolishing the scrum at boarding gates.

‘I think allocated seating has been the single most popular thing we've ever done with our passengers and it's definitely taken a barrier away from people who would never have tried us before, particularly business travellers,’ chief exec Carolyn McCall told BBC Radio 4’s Today programme.

The results come as Heathrow and Gatwick made their final submissions to the Airports Commission (headed up by MT diarist Sir Howard Davies). McCall said aviation capacity shouldn’t be used as ‘political football’ and appeared to weigh in on the side of the larger airport, despite recently signing a seven year deal with Gatwick.

‘There is a particular crunch in London that that tends to be around Heathrow,’ she said.

Airports aside, EasyJet looks to be doing pretty well. MT reckons McCall and her team will be taking a Warren Buffett-esque approach to investors’ flightiness and not getting too het up about short-term share price turbulence.

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