easyjet plane

Budget airline easyJet plc (EZJ) posting a trading update for stock market investors yesterday. It covers their performance during the quarter ending 30 June 2019. The company’s financial year ends on 30 September so this is their update for Q3 2019.

easyJet plc performance

easyJet plc are currently part of the FTSE 250 index. They were demoted from the FTSE 100 index in the June re-shuffle after their share price dragged down the total market value of the company. This was a big blow to the company after six years in the top flight. As a result, investors were eagerly awaiting the latest trading update.

The easyJet plc statement claims that performance during the last quarter was in-line with expectations. The company have elected not to revise forecasts for the remainder of the year.

easyJet saw positive revenue per seat having ad increased efforts to drive down their costs through better operational performance. The company suggest less cancellations and delays have contributed to this. The airline actually made 847 cancellations in the last quarter. This may sound like a lot but compare that to 2,606 cancellations made during the same quarter last year. Delays over three hours also dropped 32% in the last quarter compared to the same period last year.

Number crunching the easyJet plc trading update

Compared to this time last year the company saw:

  • Total revenue increase by 11.4% to £1,761 million.
  • Passenger numbers jump by 8% to 26.4 million thanks to an increase in seat capacity.
  • Total revenue per seat grow 0.7% at constant currency (that is not taking into account currency market fluctuations)

Challenges ahead

Whilst the easyJet plc trading update strikes a positive tone, the company have warned of tough economic conditions across Europe and uncertainty driven by Brexit being a factor impacting continued demand.

The company have said that the air traffic environment remains challenging and they are continuing efforts to improve their operational resilience. A focus is being placed on fulfilling flights during the busy summer season and limiting delays which can be costly.

Looking ahead

The airline has also made an announcement that serves as a blow to fierce rivals Ryanair. The company have lured Ryanair Chief Operations Officer Peter Bellew to the company. He will take up the role of Chief Operating Officer.

In terms of financial performance, easyJet are reasonably upbeat about the final quarter of their financial year (1 July 19 – 30 September 19). The company are forecasting for capacity at year-end to be up approximately 10% over the full year. They also expect costs per seat to be reduced. The airline is anticipating an end-of-year profit of between £400 millions and £440 million.

The airline industry continues to be a challenging environment to operate, particularly with the added uncertainty surrounding Brexit. The next update will come following the company’s financial year on 30 September. Investors will be keenly awaiting this to see if they can deliver against their forecast. They will also want to understand how the company plans to tackle the year ahead.

 

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Source: easyJet (July 19)

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