By Anna Peel. Originally published at ValueWalk.
EasyJet plc (LON:EZJ)’s half year pre-tax losses were £545m, compared to £701m last year. That was at the better end of expectations, and reflects an increase in revenue from £240m to £1.5bn. Capacity was 30.3m seats, up significantly on 6.4m last year.
easyJet expects to operate 90% of pre-pandemic capacity in the current quarter. In the last 10 weeks, bookings have been 6% above the same period in 2019.
The group said: “Despite the rise in living costs, consumer research suggests there is still strong appetite to travel due to pent up demand and people topping up savings during the pandemic. 1 in 2 respondents in the UK say limited opportunities to travel during the pandemic has made their holidays more important to them than before”.
The shares rose 2.1% following the announcement.
Sophie Lund-Yates, equity analyst at Hargreaves Lansdown:
“easyJet’s about-turn is almost complete, with plans to operate within a whisker of pre-pandemic levels by the end of the year. Revenue has increased dramatically as the short-haul specialist has ramped up capacity, and crucially – passengers have come to fill it. That means losses have been narrowing despite the enormous cost that comes with switching an entire airline back into the “on” position.
The group’s also confident that the cost-of-living crisis isn’t touching performance. It was quick to point out that holidays are more important to people these days, after two years without travel abroad. This idea does ring true to some extent, but there’s no getting away from the fact that if faced with a recession, a holiday – whether a hop down the road or a city break to Prague, simply isn’t going to happen for millions of people. This isn’t a flashing red indicator at this juncture, but it’s something to keep one eye on.”
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