Wed, Nov 19, 2014 - Page 15 News List

EasyJet winter bookings up despite rising competition

Reuters, LONDON

An aircraft tractor maneuvers an Airbus Group NV aircraft operated by EasyJet near the control tower at London Gatwick airport in Crawley, England, on Nov. 6.

Photo: Bloomberg

British low-cost airline EasyJet PLC yesterday reported a small rise in winter bookings, shrugging off concerns about an increasingly competitive European travel market.

The company also posted a 21.5 percent rise in pretax profit to £581 million (US$909 million) for the year ended on Sept. 30, in line with an upgraded forecast it made last month.

Cheap fares have helped EasyJet and rival Ryanair Ltd win market share in the European short-haul travel sector, against traditional airlines such as Air France-KLM SAS and Lufthansa AG, which have recently announced plans to expand their own budget services.

“EasyJet has proved that its profit upgrades earlier in the year were fully justified, whilst its outlook remains defiantly upbeat,” Hargreaves Lansdown PLC head of equities Richard Hunter said.

The company, Europe’s No. 2 low-cost carrier after Ryanair, said its strong position in main airports, where new slots are not readily available, would help it attract more customers.

It did not give any figures for the rise in winter bookings, but said it expected to increase capacity — measured in seats flown — by about 3.5 percent in the first half of its new fiscal year and by about 5 percent for the full year.

Ireland’s Ryanair has recently been moving into space traditionally occupied by EasyJet — improving its previously much criticized customer service and expanding into main airports used by business travelers.

That strategy and a surge in winter bookings helped Ryanair raise its annual profit forecast by almost 20 percent earlier this month.

Shares in EasyJet traded down 1.9 percent to £15.15 in London, with analysts saying that the muted reaction was expected, in the context of an 18 percent rise over the past three months.

EasyJet also said it would lift its ordinary dividend per share by 35.5 percent to £0.454, in line with a proposal made earlier this year to reward shareholders with 40 percent of profit, above the previous one-third distribution.

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