EasyJet Plc raised its full-year earnings guidance, bolstered by U.K. holidaymakers who fled the wettest August in a century for beach destinations in warmer locations including Spain, Portugal and Greece.
Pretax profit in the 12 months ending Sept. 30 is now expected to be in a range of 675 million pounds to 700 million pounds ($1.03 billion-$1.07 billion), up from a previous estimate of 620 million pounds to 660 million pounds, the Luton, England-based company said Thursday. EasyJet rose as much as 7.2 percent in London trading.
EasyJet was able “to maximize the strong late summer demand from U.K. passengers to get away to beach and city destinations across Europe,” Chief Executive Officer Carolyn McCall said in the release, adding that the carrier anticipates “new records for full year revenue and profit.”
Record August passenger numbers and a positive outlook for September are offsetting disruption earlier in the year, EasyJet said. Europe’s second-biggest discount carrier faced a strike threat over pay in the U.K., two fires at its key Italian base at Rome Fiumicino airport, an 8 million-pound settlement with Eurocontrol, as well as fallout from the Greek crisis and terror attacks in Tunisia.
Easyjet gained as much as 121 pence to 1,793 pence and was trading 5.5 percent higher at 1,764 pence as of 10:13 a.m. in London. Before today, the stock was little changed this year.
“The robustness of its primary network airline model is clearly delivering,” Davy Holdings analyst Stephen Furlong said in a note to investors. “The challenge will be to maintain the robust unit revenues given likely incremental competitor capacity.”
Discount competitor Jet2.com, which specializes in holiday flights from northern England, also reported a surge in summer traffic, led by package bookings, saying its performance for the year through March 31 should surpass analyst estimates.
Shares of owner Dart Group Plc, which also ordered 27 Boeing Co. 737 jetliners, rose as much as 12 percent, the most in six months, and later traded up 9.7 percent at 484.75 pence.
Flights from Britain were encouraged by a damp summer that saw some weather stations in the south-coast holiday counties of Sussex, Hampshire and Dorset report record August rainfall, according to the U.K. Met Office. The whole of Cornwall, which gets 5 million annual visitors, was the wettest in 65 years.
Ryanair Holdings Plc, Europe’s No. 1 low-cost carrier, yesterday warned of an upcoming price war over the winter period as short-haul carriers across Europe add capacity and pass on lower fuel costs to passengers. EasyJet, Ryanair and Norwegian Air Shuttle are among the airlines adding capacity as network carriers like Air France-KLM Group retrench.
Occupancy across EasyJet’s network grew about 6 percent, helping boost August passenger numbers above 7 million for the second straight month and the load factor to a record 94.4 percent, EasyJet said. Fuel and exchange rate costs are within the range of previous forecasts, the carrier added.