EasyJet (EZJ.L) expressed confidence in sustained travel demand throughout the summer, anticipating further growth and sparking a rise in its shares following a forecast of a smaller winter loss than expected.
Despite escalating fares and tightened incomes due to increased interest rates, European consumers persist in spending on travel.
Johan Lundgren, CEO of easyJet, noted a “positive momentum” heading into the crucial travel season, stating, “We move into the summer period with confidence that we can deliver another record summer performance.”
Shares in easyJet climbed 4% at 0800 GMT, though at 538 pence, they remain significantly below pre-pandemic levels of 1,300 pence, amidst concerns regarding the sustainability of travel spending increases.
The airline faced challenges related to Middle East tensions, leading to the cancellation of flights to Israel until October, following a limited service resumption in March.
Lundgren explained, “We reallocated into destinations where we believe that there would be strong demand going forward.”
EasyJet plans to bolster capacity to destinations such as Malaga and Mallorca, with predominant demand persisting in typical holiday spots like Portugal and city break destinations like Amsterdam.
Despite the turmoil, bookings to other Middle Eastern destinations such as Egypt and Turkey remained unaffected.
For the six months ending March, the airline anticipates a pretax loss ranging from 340 million pounds to 360 million pounds, surpassing the consensus forecast of a 390 million pound loss. Analysts at Goodbody acknowledged the better-than-expected revenue performance in the first half.
Looking ahead to the July to September period, easyJet plans to increase capacity by 7% with revenue per seat expected to surpass last year’s figures. The group’s holiday business also exhibits robust growth.