EasyJet forecasts soaring annual profit

“For the full year, EasyJet will grow revenue, profits and dividends”, Chief Executive Officer Carolyn McCall said in the release, adding that the carrier has has achieved a “good performance in the United Kingdom and beach routes across Europe”. The two events together accounted for 1 364 of the 1 463 flights cancelled in the quarter compared to a total of 648 flights cancelled during the comparable period a year earlier.

Total revenue fell by one per cent to £1.22bn as revenue per seat dropped 5.4 per cent to £59.08.

Third-quarter passenger numbers still rose 6.2 percent to 19.1 million as EasyJet stepped up the challenge to rivals including Air France-KLM Group and Deutsche Lufthansa AG by expanding at bigger airports and targeting corporate travelers. Cost per seat declined overall by 3.3 percent, helped by lower fuel costs.

“With 77 per cent of second half seats now booked, easyJet expects to grow profit before tax from £581m for the year to 30 September 2014 to a range of £620m to £660m for the year to 30 September 2015”.

The French air traffic controllers’ strike in April which resulted in 591 cancellations and impacted pre-tax profit of £25m was “particularly disruptive” due to its extended nature and EasyJet’s presence on French domestic routes.

Shares took off, rising by more than 4% on the FTSE 100 Index after the profits cheer and as third quarter sales were better-than-expected.

Cantor Fitzgerald said easyJet’s third-quarter trading was “strong”, though it said a few key near-term risks are still in play, including the possibility of around 3,500 Unite union-associated cabin crew taking strike action, though the broker said easyJet’s guidance appears to include these risks.

Numis said easyJet’s pretax profit guidance was in line with its estimates.

Numis Securities analysts said: “With all the concerns that the market has had about excess capacity in the market and the likely impact on yields, we believe these results will be well received”.