Low-cost airline easyJet expects to be profitable for the full year to end-September in spite of nearly trebling first-half pretax losses to £130 million ($196.4 million).
EasyJet said in a Wednesday statement that current lower fuel prices and exchange rates meant it could end the year in the black even though it remains cautious about the economy.
“The loss is what we expected, and was almost entirely driven by fuel costs,” CEO Andy Harrison told reporters, adding that the movement of Easter into the airline’s second half had also had an impact.
He said the group had sold 41% of its seats for the second half to end-September already -- about the same performance as this time last year.
“We have seen some weakness in commuter travel, and journeys to second homes, but this has been more than made up for by an increase in business travelers and some switching from long haul leisure to short haul,” Harrison said.
He added that there had been “no impact yet” from the swine flu outbreak, although the group flies almost exclusively between European destinations.
Analysts were expecting a pretax loss of £110 million to 134 million for the first half, according to Reuters estimates. The firm made a first-half loss last year of £48.4 million.
EasyJet shares, in positive territory for the year-to-date, were off 1% at 330 pence by 9:45 a.m. British time, valuing the business at around £1.3 billion.
The company has been dogged for months by boardroom battles and recently said both its chairman and finance director would leave the group.
It has recently been involved in a dispute with founder Stelios Haji-Ioannou over the expansion of its fleet, but Harrison confirmed that the group’s long-term plan to increase the number of planes to over 190 by September 2011 from an expected 180 this year remained in place.
“There were no deferral decisions made in the last quarter,” he said.
EasyJet first-half revenue climbed 15.8% to over £1 billion, while passenger volumes for April -- helped by the Easter break -- were up just over 6%. The group’s cash and money market deposits also topped the £1 billion mark. (Reuters)