Strong bookings put easyJet on path to full-year profit

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LONDON (Reuters) – EasyJet (EZJ.L) on Wednesday said it expected to beat current market expectations for 2023 based on the strength of bookings into summer and was set to deliver a full-year profit, fueling cautious optimism for an aviation sector set on recovery.

The British airline reported a headline loss before tax of 133 million pounds ($163.9 million) for the quarter to end-December, and said it expected its loss before tax for the first half to be significantly better than in the first half of 2022.

EasyJet Holidays also upgraded expectations from 30% customer growth to around 50% year-on-year and said the airline had almost 50% more customers than last year.

Many are hopeful that, even with a recession in Britain, travellers won’t sacrifice their holidays, as the aviation sector aims for an ongoing recovery towards 2019 traffic levels.

“This strong booking performance, aided by the airline’s step changed revenue capability, has driven an 80 million pound year-on-year boost in the first quarter with continued momentum as customers prioritise spending on holidays for the year ahead,” Chief Executive Johan Lundgren said in a statement.

He added on a call that easyJet (LON:EZJ) saw record-breaking sales revenue in recent weekends as customers booked holidays in places like the Greek islands and Spain, turning to easyJet in what is an increasingly high cost-of-living environment.

Ryanair (RYA.I), Europe’s biggest airline and a low-cost competitor for easyJet, said earlier this month it was expecting a very strong summer season with a reasonable prospect of average European short-haul air fares rising by a high single digit percentage.

“Airline reporting season starts optimistically, and we expect easyJet to be the first of several strong prints. Earlier guidance looks overly cautious and numbers will need to come up,” Bernstein analyst Alex Irving said in a research note.

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