EasyJet Plc said a surge in bookings for summer breaks is lifting ticket prices, aided by a cooler summer in the U.K. and northern Europe.
Revenue per seat, which reflects prices, is higher and sales for the three months through June were up 11% from a year ago, the Luton, England-based carrier said in a statement Thursday. A drop in flight cancellations has cut costs and new analytics are helping it to set fares at more profitable levels.
The late jump in bookings will provide welcome relief for European carriers that have seen margins squeezed amid a glut in capacity across the region, though EasyJet Chief Executive Officer Johan Lundgren said that’s tied to the weather and factors such as the absence of major sports events, with overall demand still relatively weak.
“We’re pleased with the late bookings,” he said on a conference call, while cautioning that the trend doesn’t mean Europeans are all suddenly rushing the beach. “The weather has been a factor, and the World Cup the previous year.”
EasyJet shares rose as much as 4% and were trading 3.5% higher at 1,070 pence as of 8:08 a.m. in London, paring the decline this year to 2.7% and valuing the company at 4.3 billion pounds ($5.4 billion).
The carrier said it’s on course to meet full-year earnings estimates, predicting a pretax profit of between 400 million pounds and 440 million pounds for the year through September. That compares with an analyst consensus figure of 423 million pounds, it said.
The third-quarter passenger tally increased 8% to 26.4 million, more than the 25.6 million average estimate in a Bloomberg survey. Expenses declined as the company cut cancellations by two-thirds by optimizing scheduling and doubling the number of backup planes, reducing compensation payments.
EasyJet has recruited Peter Bellew as chief operating officer from rival Ryanair Holdings Plc, where he occupied a similar post. Bellew had been seen as a potential successor to Ryanair boss Michael O’Leary and revealed his departure from the Irish carrier only last week, without saying where he was going.
By Simon Foy