easyJet stated (06-Oct-2010) it expects to report a profit before tax result exceeding GBP150 million, the top end of its previous guidance range of GBP100 million to GBP150 million, for the 12 months ended 30-Sep-2010, due to “robust” traffic growth. Passenger numbers transported by the carrier rose 7.9% year-on-year to 48.8 million while load factor increased 1.5 ppt to 87.0% during the period. For the month of Sep-2010, passenger numbers rose 8.0% to 4.8 million while load factor increased 1.2 ppt to 89.3%. The LCC expects total revenue per seat at constant currency for the quarter ended 30-Sep-2010 to increase by more than 6% year-on-year. easyJet downgraded its forecast of the impact of the volcanic eruption in Iceland on the carrier’s FY2010 results from GBP65 million to GBP60 million. The carrier raised concerns regarding the ongoing official and unofficial strike by air traffic controllers in France, Spain and Greece, which is expected to cost the carrier up to GBP6 million in customer compensation for flights cancelled in Sep-2010. easyJet is scheduled to release its FY2010 results and outlook on 16-Nov-2010. [more]
easyJet expects FY2010 profit to exceed target, Sep-2010 pax up 8%
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Ryanair, easyJet, Norwegian, Wizz Air, Pegasus Airlines: Europe's top LCCs' collective margin drops
CAPA's previous analysis of the 3Q2016 results of Europe's big three legacy airline groups highlighted a fall in their collective operating margin, after growth in 1H2016. This report shows that Europe's five leading LCCs, in aggregate, also suffered a fall in profit and margin in the quarter.
Three of the five – Ryanair, Norwegian and Wizz Air – improved their profit margin in the quarter, but easyJet's drop in margin was heavy enough to bring down the collective result. Pegasus' margin also declined.
Nevertheless, the LCC five remain collectively far more profitable than the legacy three. Moreover Europe's two most profitable airlines, Ryanair and Wizz Air, look set to increase their margin lead this year. Even easyJet, which has had a bad year by its standards, achieved a higher margin for calendar 9M2016 than the most profitable of the big three legacy groups, which was IAG.
The divergence of results in the European sector suggest that not all airlines are following the same cycle. However the collective margin decline for the continent's leading LCCs, and its major legacy airline groups, at least gives reason to question whether or not the cyclical upswing may have run its course.
easyJet: accelerating growth to take share from legacy airlines in strong easyJet airports
In spite of challenging market conditions and falling profits, easyJet remains on the offensive in its fight for market share with legacy airlines. It is also making contingency plans to apply for an EU AOC to ensure continued intra-European traffic rights in the post-Brexit future.
easyJet's revenue per seat, pre-tax profit and return on capital employed all fell in FY2016 (year to Sep-2016), the first reversal since before CEO Dame Carolyn McCall took the helm in FY2010. In spite of lower fuel prices, easyJet could not lower its cost per seat fast enough to offset the drop in unit revenue. Load factor was just above flat at 91.6%, so the drop in revenue per seat was all price-related. A series of external events put pressure on pricing – including terrorism, ATC strikes and the UK's Brexit vote.
Some airlines might tighten their capacity growth in the face of weak pricing, but easyJet plans to accelerate its seat growth from 6% in FY2016 to 9% in FY2017. It has its sights on an opportunity to take share from legacy airlines in airports where it already has a strong market position.