EasyJet Reduces First-Half Loss Estimate on Mild Weather

Mar 25, 2014 4:04 am ET

(Updates with shares in fifth paragraph.)

March 25 (Bloomberg) -- EasyJet Plc, Europe’s second- biggest discount airline, said its first-half loss will be narrower than predicted as mild winter weather led to limited disruption and trimmed de-icing costs.

The pretax loss will be 55 million pounds ($90.7 million) to 65 million pounds in the six months through March, compared with a loss of 61 million pounds a year earlier, EasyJet said in a statement today. The company previously forecast a loss of 70 million pounds to 90 million pounds. EasyJet shares rose as much as 5 percent.

EasyJet is intensifying efforts to win business passengers as well as older, more affluent customers with allocated seats, flexible tickets, fast-tracking and higher frequencies to key destinations. The company, which rolled out allocated seating in 2012, predicted fiercer competition in November as discount rivals including Ryanair Holdings Plc, Norwegian Air Shuttle AS and Spain’s Vueling chase market share.

“This performance demonstrates our continued focus on cost and progress against all our strategic priorities,” Chief Executive Officer Carolyn McCall said in the statement. “It also demonstrates EasyJet’s structural advantage in the European short-haul market against both the legacy and low-cost competition.”

Shares Rise

The stock traded 4.6 percent higher at 1,707 pence at 8 a.m. in London.

Revenue per seat for the six months ended March 31 will be about 1.5 percent higher, the carrier estimated.

The timing of the 2013 Easter holiday boosted sales by 25 million pounds in the first half of last year, which will not be the case this year, EasyJet reiterated. The cost per seat excluding fuel and currency swings probably will be about 0.5 percent higher, which is better than expected and driven by lower expenses related to de-icing and disruption, the carrier said.

Under McCall, Luton, England-based EasyJet has added routes including London-Moscow and Milan Linate to Rome Fiumicino. A new base in Naples will be operational starting this month.

EasyJet will release results for the six months through March 31 on May 13.