TIDMEZJ
RNS Number : 6762A
easyJet PLC
24 January 2024
24 January 2024
easyJet plc
('easyJet')
easyJet Trading Update for the quarter ended 31 December
2023
easyJet's performance has improved year on year, with booking
trends giving a positive outlook for the remainder of the financial
year. Underlying trends in Q1 were strong, although headline
results were impacted by the conflict in the Middle East.
-- Q1 headline loss before tax GBP126 million (Q1'23 GBP133 million loss)
o Passenger growth +14% YoY
o RPS +3% YoY
-- Load factor -1ppt YoY
-- Ticket yield +2% YoY
-- Ancillary yield +6% YoY
o CPS ex fuel reduced 3% YoY
o easyJet holidays delivered GBP30 million profit (Q1'23 GBP13
million profit)
-- Customer growth +48%
-- Winter FY24 improvement:
o Expect H1 loss to reduce YoY, despite a c.GBP40 million direct
impact(1) from the Middle East conflict
-- Expect Q2 RPS to be up by mid-single digits
-- H1 CPS ex fuel to be broadly flat YoY
-- Remain on track to deliver disciplined capacity growth of c.9% in FY24
o H1'24 c. 42m seats, +11% YoY
o H2'24 c. 59m seats(2) , +8% YoY
-- Positive outlook for summer:
o Strong turn of year bookings with seats sold and yield ahead
YoY
o H2 RPS remain well ahead YoY
-- Yields and loads both ahead in Q3 & Q4
o Expect H2 CPS ex fuel to be up low single digits YoY
o easyJet holidays continues to expect >35% customer growth
YoY in FY24
Summary
easyJet's financial performance in the first quarter showed
year-on-year improvement at a headline level, with underlying
progress stronger still. The onset of conflict in the Middle East
on 7 October had short term impacts from a pause in flights to
Israel and Jordan (which currently remains in place) and a
temporary slowdown in flight bookings for the wider industry.
Demand and bookings have recovered strongly from late November.
easyJet holidays had another strong quarter, with customer numbers
increasing by 48% compared to the same period last year, and a
profit of GBP30 million, a 131% increase year-on-year.
easyJet's seasonal winter loss for the first half of FY24 is
also expected to improve year-on-year despite a direct impact(1) of
c.GBP40 million (and further indirect impacts) from the conflict in
the Middle East. This improvement comes as a result of disciplined
capacity growth where demand is strongest, alongside productivity
benefits. easyJet expects cost per seat excluding fuel to remain
broadly flat in the first half of 2024, with fuel costs c.7%
higher.
Although still early, bookings for summer 2024 are building
well, with the turn of the year bookings period showing an increase
in both volume and pricing compared to the same period last year.
Demand for easyJet's primary airport network remains strong, with
RPS for the second half of FY24 currently well ahead year-on-year.
This positive momentum is also evident in the holidays business,
where we continue to expect customer growth to exceed 35%
year-on-year.
Johan Lundgren, CEO of easyJet, commenting on the results
said:
"We delivered an improved performance in the quarter which is
testament to the strength of demand for our brand and network. The
popularity of easyJet holidays also continues to grow, with 48%
more customers in the period.
"We see positive booking momentum for summer 2024 with travel
remaining a priority for consumers. Flight and holidays bookings
took off strongly during the traditional busy turn of year sales
period, as customers opted to secure their summer holidays to firm
favourites like Spain and Portugal alongside destinations further
afield like Greece and Turkey.
"easyJet remains focused on delivering for our customers in the
coming months, while also expecting to deliver continuing
performance gains"
Capacity
During Q1 easyJet flew 23.0 million seats. In the same period
last year easyJet flew 20.2 million seats. Load factor was 86% (Q1
FY23: 87%).
Passenger(4) numbers in the quarter increased to 19.8 million
(Q1 FY23: 17.5 million).
October November December Q1 Q1
2023 2023 2023 FY24 FY23
Number of flights 51,604 34,518 42,150 128,272 112,892
-------- --------- --------- -------- --------
Peak operating aircraft 317 266 277 317 313
-------- --------- --------- -------- --------
Passengers (4) (thousand) 8,066 5,324 6,452 19,842 17,481
-------- --------- --------- -------- --------
Seats flown (thousand) 9,210 6,199 7,585 22,994 20,159
-------- --------- --------- -------- --------
Load factor (5) 88% 86% 85% 86% 87%
-------- --------- --------- -------- --------
Fleet
On 19 December 2023, shareholders approved the purchase of 157
Airbus A320neo family aircraft, scheduled for delivery between FY29
and FY34. On 31 December 2023, easyJet finalised an agreement to
purchase engines from CFM, securing the company's long-term
strategy of fleet modernisation and disciplined growth. easyJet
expects the delivery of 16 aircraft in the current financial year
as planned.
Revenue, Cost and Liquidity
Revenue continued to benefit from strong demand for easyJet's
leading network through October where RPS was +12% year on year.
However, t he onset of the conflict in the Middle East on 7 October
had short term impacts from a pause in flights to Israel and Jordan
(which currently remains in place) and a temporary slowdown in
flight bookings for the wider industry. Demand and bookings have
recovered strongly from late November.
The airline's increased productivity and utilisation led to a 3%
year-on-year reduction in non-fuel unit costs. Rising fuel prices
resulted in a 15% (GBP2.92) per seat increase in fuel costs
compared to the same period last year.
Financing costs benefitted from a decrease in gross debt and a
rise in the interest rate on floating-rate cash. However, foreign
exchange movements over the quarter resulted in a non-operational,
non-cash FX loss of GBP4 million from balance sheet
revaluations.
In Q1 of FY24, easyJet repaid a EUR500 million Eurobond which
matured in October 2023.
Q1'24 Q1'23 Variance
Passenger revenue (GBP'm) 1,133 975 16%
-------- -------- ---------
Airline ancillary revenue (GBP'm) 486 406 20%
-------- -------- ---------
Holidays revenue(3) (GBP'm) 181 93 95%
-------- -------- ---------
Group revenue (GBP'm) 1,800 1,474 22%
-------- -------- ---------
Fuel costs (GBP'm) (516) (393) (31)%
-------- -------- ---------
Airline headline EBITDAR costs (GBP'm) (1,057) (959) (10)%
-------- -------- ---------
Holidays EBITDAR costs(3) (GBP'm) (153) (80) (91)%
-------- -------- ---------
Group headline EBITDAR costs (GBP'm) (1,726) (1,432) (21)%
-------- -------- ---------
Group headline EBITDAR (GBP'm) 74 42 76%
-------- -------- ---------
Group depreciation & amortisation
(GBP'm) (191) (164) (16)%
-------- -------- ---------
Group LBIT (GBP'm) (117) (122) 4%
-------- -------- ---------
Financing costs excluding balance
sheet revaluations (GBP'm) (5) (24) 79%
-------- -------- ---------
Balance sheet FX revaluations (GBP'm) (4) 13 (131)%
-------- -------- ---------
Group headline LBT (GBP'm) (126) (133) 5%
-------- -------- ---------
Airline passenger revenue per seat
(GBP) 49.26 48.35 2%
-------- -------- ---------
Airline ancillary revenue per seat
(GBP) 21.13 20.12 5%
-------- -------- ---------
Total airline revenue per seat (GBP) 70.39 68.47 3%
-------- -------- ---------
Airline headline cost per seat ex
fuel (GBP) (54.80) (56.21) 3%
-------- -------- ---------
Airline fuel cost per seat (GBP) (22.42) (19.50) (15)%
-------- -------- ---------
Airline headline total cost per
seat (GBP) (77.22) (75.71) (2)%
-------- -------- ---------
Cash and money market deposits (GBP'bn) 1.9 3.0 (37)%
-------- -------- ---------
Net debt (GBP'bn) 0.5 1.1 55%
-------- -------- ---------
Average Sector Length (km) 1,182 1,212 (2)%
-------- -------- ---------
Fuel & FX Hedging (as at 31 December 2023)
Jet Fuel H1'24 H2'24 H1'25 USD H1'24 H2'24 H1'25
Hedged position 80% 55% 29% Hedged position 78% 58% 32%
----- ----- ----- ----- ----- -----
Average hedged rate Average hedged rate
($/MT) 866 821 821 (USD/GBP) 1.22 1.24 1.25
----- ----- ----- ----- ----- -----
Current spot ($/MT) c.895 Current spot (USD/GBP) c.1.27
at 23.01.24 at 23.01.24
------------------- -------------------
For further details please contact easyJet plc :
Institutional investors and analysts:
Michael Barker Investor Relations +44 (0) 7985 890 939
Adrian Talbot Investor Relations +44 (0) 7971 592 373
Media:
Anna Knowles Corporate Communications +44 (0) 7985 873 313
Olivia Peters Teneo +44 (0) 20 7353 4200
Harry Cameron Teneo +44 (0) 20 7353
1) Direct impact of GBP40 million relates to the lost
contribution in H1'24 from pausing flying to Israel and Jordan
alongside the demand softness seen in Egypt following the onset of
the conflict in the Middle East on 7 October.
2) Represents on sale capacity for H2 of FY'24.
3) easyJet holidays numbers include elimination of intercompany
airline transactions
4) Represents the number of earned seats flown. Earned seats
include seats which are flown whether or not the passenger turns
up, as easyJet is a no refund airline and once a flight has
departed, a no-show customer is generally not entitled to change
flights or seek a refund. Earned seats also include seats provided
for promotional purposes and to staff for business travel.
5) Represents the number of passengers as a proportion of the
number of seats available for passengers. No weighting of the load
factor is carried out to recognise the effect of varying flight (or
"sector") lengths.
This announcement may contain statements which constitute
'forward-looking statements'. Although easyJet believes that the
expectations reflected in these forward-looking statements are
reasonable, it can give no assurance that these expectations will
prove to have been correct. Because these statements involve risks
and uncertainties, actual results may differ materially from those
expressed or implied by these forward-looking statements.
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END
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