TIDMEZJ
RNS Number : 3799A
easyJet PLC
21 January 2020
21 January 2020
EASYJET TRADING STATEMENT FOR THE QUARTERED 31 DECEMBER 2019
Strong start to full year 2020 with continued positive
momentum
including an upgrade in H1 revenue per seat guidance
Summary
easyJet has delivered a strong performance in the quarter. The
delivery of self-help initiatives, robust customer demand and low
levels of competitor capacity drove outperformance in both our
passenger and ancillary revenue per seat leading to an upgrade to
our H1 revenue guidance. Our cost performance was in line with
expectations, while our Operational Resilience programme continued
to be a driving force behind a robust operational performance.
easyJet expects to deliver a first half headline loss before tax
better than H1 2019.
Commenting, Johan Lundgren, easyJet Chief Executive said:
"I'm pleased that we have made a strong start to the year with
continued positive momentum. The improvement in our revenue per
seat has been driven by our self-help revenue initiatives combined
with robust customer demand and a lower capacity growth market.
"Cost per seat is in line with expectations, helped by our
Operational Resilience programme which has not only improved
overall customer satisfaction in the quarter but also enabled us to
manage our costs.
"easyJet holidays launched successfully with customers looking
to benefit from our unrivalled flexibility, great value and
handpicked hotels.
"Being an industry leader in sustainability is important to us,
and since our announcement in November we have offset the carbon
emissions from the fuel used for all our flights. This means nine
million customers have flown net-zero carbon flights with us and
our offsetting programme has been received very positively by
customers, staff and other stakeholders.
"We, of course, recognise offsetting is only an interim measure
and we continue to work on reducing our carbon footprint in the
short term, coupled with long-term work to support the development
of new technology, including hybrid and electric planes, to
reinvent aviation for the long-term.
"And I am delighted to confirm that Peter Bellew has now joined
easyJet as Chief Operating Officer."
Revenue
Total group revenue for the quarter ending 31 December 2019
increased by 9.9% to GBP1,425 million. Passenger revenue increased
by 9.7% to GBP1,124 million and ancillary revenue increased by
10.8% to GBP301 million.
Passenger(1) numbers in the quarter increased by 2.8% to 22.2
million, driven by an increase in capacity(2) of 1.0% to 24.3
million seats. Load factor(3) increased by 1.6 percentage points to
91.3%.
Total airline revenue per seat increased by 8.8% at constant
currency, outperforming expectations. This has been driven by:
-- A solid yield performance supported in particular by
easyJet's focus on initiatives to optimise late yields as well as a
strong performance in Berlin, reflecting the work we have done to
optimise our German network;
-- Robust demand as well as low capacity growth by easyJet, as
planned and low growth by competitors on easyJet's markets;
-- Continued growth in ancillary revenue per seat through better
bag and allocated seating sales, as well as the introduction of a
new car rental offering from our partner Car Trawler;
-- Benefit from Thomas Cook administration in September 2019
Cost
easyJet's underlying costs for the quarter were in line with
expectations. Airline headline cost per seat excluding fuel at
constant currency increased by 4.3% in the quarter reflecting:
-- Cost per seat pressure from:
- Lower capacity growth, as planned
- Inflationary linked increases in ground handling costs, airport costs and maintenance
- Ownership costs reflecting new aircraft deliveries
- Annualisation of crew pay deals and better crew retention
- French national strikes in December which drove 813 cancellations
-- Partially offset by:
- Continued focus on our cost initiatives, including the Operational Resilience programme
- Up-gauging of fleet, as easyJet continues to move from A319s to A320s and A321s
Customer and operational performance
easyJet has improved its On-Time Performance (OTP). Despite the
air traffic environment remaining challenging, easyJets continues
to focus on ensuring flight fulfilment and reducing severe delays
for its customers. easyJet experienced 1,274 cancellations in the
quarter, with 813 of those due to strikes in France in December,
while delays of greater than 3 hours decreased by 21% compared to
Q1 last year. This helped drive a strong Customer Satisfaction
(CSAT) score of 77.4% for the quarter, an improvement of 0.5
percentage points (Q1 2019: 76.9%).
OTP % arrivals within Oct Nov Dec Q1
15 minutes
----------------------- ---- ---- ---- ----
2020 77% 89% 75% 80%
2019 76% 86% 77% 79%
----------------------- ---- ---- ---- ----
Traffic statistics
Load factor increased in Q1 2020, as expected, with passenger
growth in line with expectations.
Oct Nov Dec Q1
---------------------- ------ ------- ------ ------
Passengers (million) 8.8 6.2 7.2 22.2
Passenger growth 2.4% (0.3)% 6.0% 2.8%
Load factor 91.6% 90.8% 91.3% 91.3%
---------------------- ------ ------- ------ ------
easyJet holidays
On 28 November 2019 easyJet successfully launched its holidays
business, with c.700 directly contracted hotels to over 100
destinations. 85% of customers cite great value, hotel choice and
website ease of use as the primary driver of booking. This
flexibility, through the leading easyJet European network, has been
well received with around 50% of customers to date choosing
holidays spanning other than the traditional 7 or 14 nights. Our
direct contracts with hotels have performed well accounting for
c.50% of the bookings.
Sustainability
Our programme of carbon offsetting on behalf of our customers
has been well received. We have seen a significant improvement in
customer satisfaction as a result of this initiative, with a 7
percentage point increase from customers who are aware their flight
was offset and with 11% more customers saying they will choose
easyJet the next time they fly as a result of their flight being
offset.
We have offset the carbon emissions from fuel used for all of
our flights since 19th November. This represents 9 million easyJet
customers who have taken net zero carbon flights already this year.
This means that we have offset 800,000 tonnes of carbon so far.
Sale and Leaseback
As planned, to further facilitate our fleet management strategy,
easyJet completed a sale and leaseback of 10 A319 aircraft in the
quarter, generating GBP114 million in cash. The transaction
resulted in a small gain on disposal which will be disclosed as a
non-headline item in the income statement in the first half.
Outlook
For the year ending 30 September 2020 easyJet (excluding easyJet
holidays) expects:
-- Full Year capacity to grow by c.3%
- H1 to grow c.1.5% - slightly lower than the previous
expectation of c. 1.7%, primarily due to French air traffic control
strikes
-- H1 revenue per seat at constant currency to increase by mid
to high single digits - compared to previous expectation of
'increase by low to mid single digits'
- 75% of first half seats have now been booked, which is just
over 1 percentage point ahead of the same time last year
-- Full Year headline cost per seat excluding fuel at constant
currency to be up low single digits assuming normal levels of
disruption
- H1 up mid single digits (includes an expected one-off maintenance charge)
-- Full Year unit fuel bill to be between GBP110 million to
GBP170 million adverse(4) . The total fuel bill to be c.GBP1.64
billion, which includes c.GBP25m investment in carbon
offsetting
-- Full year foreign exchange(4) movements to have a c.GBP70
million positive impact on headline profit before tax and c.GBP25m
of this movement is part of the total fuel bill
easyJet holidays is expected to be at least breakeven for the
financial year ending 30 September 2020.
easyJet expects to deliver a first half headline loss before tax
better than H1 2019 (H1 2019: GBP275m loss).
easyJet remains focused on driving future returns, positive free
cash flow over the longer term and maximising headline profit per
seat as it continues to deliver value for customers and
shareholders.
KEY Q1 FINANCIALS
Three months ended 31 Dec 2019 31 Dec 2018 Change
Fav./(adv.)
Passengers (million) (1) 22.2 21.6 2.8%
------------ ------------ -------------
Seats flown (million) 24.3 24.1 1.0%
------------ ------------ -------------
Load factor (%) (3) 91.3% 89.7% 1.6ppts
------------ ------------ -------------
Total revenue (GBP million) 1,425 1,296 9.9%
------------ ------------ -------------
Passenger revenue (GBP million) 1,124 1,025 9.7%
------------ ------------ -------------
Ancillary revenue (GBP million) 301 271 10.8%
------------ ------------ -------------
Total airline revenue per seat
reported (GBP) 58.56 53.89 8.7%
------------ ------------ -------------
Total airline revenue per seat
constant currency (GBP) 58.63 53.89 8.8%
------------ ------------ -------------
Total airline headline cost
per seat reported (GBP) (58.40) (56.71) (3.0%)
------------ ------------ -------------
Total airline headline cost
per seat at constant currency
(GBP) (59.41) (56.71) (2.6%)
------------ ------------ -------------
Airline headline cost per seat
excluding fuel at constant
currency (GBP) (45.29) (43.42) (4.3%)
------------ ------------ -------------
ASKs (million) 26.9 26.0 3.6%
------------ ------------ -------------
RPKs (million) 24.9 23.5 6.0%
------------ ------------ -------------
Average sector length (km) 1,106 1,079 2.6%
------------ ------------ -------------
For further details please contact easyJet plc:
Institutional investors and analysts:
Michael Barker Investor Relations +44 (0) 7985 890 939
Holly Grainger Investor Relations +44 (0) 7583 101913
Media:
Anna Knowles Corporate Communications +44 (0) 7985 873 313
Dorothy Burwell Finsbury +44 (0) 207 251 3801
+44 (0) 7733 294 930
Conference call details
Time: 08.00 GMT
Standard International Access: +44 (0) 20 3003 2666
UK Toll Free: 0808 109 0700
Password: easyJet
A copy of this Trading Statement is available at
http://corporate.easyjet.com/investors
Notes:
1. Represents the number of earned seats flown. Earned seats
include seats that 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.
2. Capacity based on actual number of seats flown.
3. 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.
4. Based on fuel spot price range of $600 to $700. US $ to GBP
sterling 1.33, Euro to GBP sterling 1.18
5.
http://corporate.easyjet.com/investors/shareholder-services/eu-share-ownership
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END
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