EasyJet counts cost of Middle East crisis but is upbeat about summer

The carrier said flights to Israel, Jordan and Egypt made up 4% of its capacity. It continues to fly to Egypt. “Early winter results for FY24 will see an impact from the conflict in the Middle East,” it said.

“Additionally, there was a broader impact on near-term flight searches and bookings across the industry, though this seems to be coming back with a recent improvement in trading. Accordingly, despite positive underlying strength, easyJet does not currently expect its Q1 loss to improve year on year.”

Looking ahead, it said: “The present booking strength for summer 2024, coupled with supply constraints in Europe, provide a positive outlook for the year as a whole. The 2024 financial year has begun positively with strong year on year profit growth in October and revenue per seat on early bookings for Q2-Q4 pleasingly ahead of last year,” it said.

It added: “There’s also strong growth in easyJet holidays’ bookings for all periods on sale, continuing the upward trend.”

The group said summer 2023 had seen it achieve “a record performance”, including “market-beating growth” for easyJet holidays.

The group turned a £208 million loss in 2022 into a pre-tax profit of £432 million but incurred a £23 million hit by returning slots at Berlin’s Brandenburg airport after downsizing from 18 aircraft to 11.

During the year, capacity increased 14% to 92.6 million seats. Passenger numbers jumped 19% to 82.8 million and average load factors rose three points to 89%. Revenue per seat increased 21% to £79.84 but fuel costs per passenger soared 40% to £21.95, giving a per seat profit before tax (PBT) for the airline of £3.59. The airline’s “long-term” profit per seat target is £7-£10.

It said: “The levers to achieving this are reducing winter losses, growing easyJet holidays to deliver over £250 million of PBT and the cost savings that our current Airbus order book will deliver from fleet efficiency and upgauging.”

EasyJet holidays is already making a big contribution; it increased passenger numbers by 77%, from 1.1 million to 1.9 million, producing a £122 million profit before tax, compared to £38 million the previous year.

The airline is also on track to grow rapidly. It comprised 336 aircraft at year-end, an increase of 16 year on year. It has another 315 aircraft on order for delivery by 2029, including one made in October for 157 Airbus A320 and A321s.