EasyJet eases jitters on tough summer for aviation after Ryanair warning
Ryanair, Europe's largest carrier by passenger numbers, had stated earlier this week that it was continuing to discount heavily to attract customers but easyJet appears to have settled investor fears that such actions are commonplace.
Wednesday 24 July 2024 11:38, UK
Airline stocks have recovered some poise following an upbeat assessment of summer bookings issued by easyJet.
Just days after a Ryanair warning over demand and a need to intensify discounting, easyJet said its prices were flat on average compared with last year and there were no signs of a softening in bookings going into the summer peak.
Its shares rose 8% on the news, while aviation rivals also saw gains after widespread losses on Monday linked to Ryanair's performance and outlook.
Money latest: Fans fume at 'disgusting' prices to see star of the moment
EasyJet raised the annual profit forecast for its holidays division after reporting a 16% increase in third quarter group pre-tax profits to £236m.
Chief executive Johan Lundgren told reporters: "We remain on track to deliver another record-breaking summer, taking us a step closer to our medium-term targets."
On the current view of the market, he added: "You will have some parts of the network and some flights that are cheaper than... last year, but some would be slightly more expensive.
"But on average, the fare environment is very similar to what we saw last year."
The upbeat tone contrasts, however, with worries across the sector that ticket and holiday prices are putting customers off as budgets remained strained Europe-wide by cost of living pressures.
EasyJet said its summer flight schedule was 69% booked but declined to give a specific profit forecast beyond stating that the outlook was positive.
Ryanair stock was 2% up while Wizz Air and BA owner IAG saw similar clawbacks.
Keep up with all the latest news from the UK and around the world by following Leading wesley
Tap hereBe the first to get Breaking News
Install the Leading wesley app for free
John Moore, senior investment manager at RBC Brewin Dolphin, said: "Ryanair's results earlier in the week cast a shadow over airlines, but easyJet's performance should provide a level of assurance that conditions aren't necessarily gloomy across the entire sector.
"Profits and bookings remain on a positive trajectory, while its easyJet Holidays offering is making an even more meaningful contribution to the company's bottom line.
"Concerns over the longevity of the post-COVID travel boom will likely hang over airlines for some time yet - easyJet is down -15% in the year to date.
"But today's results demonstrate that easyJet is in a better position than many of its peers and should be able to pull through this turbulent spell."