EasyJet revenues reach greater heights

London: EasyJet defied the gloom surrounding the global airline sector by posting strong growth in quarterly revenue, helped by an uplift in the number of business travellers flying with the British budget airline and milder winter weather.

Europe's second largest low-cost carrier said yesterday revenue jumped 16.7 per cent to £763 million (Dh4.40 billion) in the three months to December, as passenger numbers rose 8.1 per cent to £12.9 million in its first quarter.

Analysts at UBS had expected sales of £730 million.

The Luton, southern England-based company, said costs per seat, excluding fuel, fell 1.6 per cent during the quarter, and it expected its seasonal first-half loss to be roughly the same as in 2010-11.

"Assuming no significant disruption in the second quarter, easyJet expects to recover most of the £100 million increase in its first-half fuel bill and contain first-half losses to between £140 million and £160 million compared to the £153 million loss reported in the first half of last year," chief executive Carolyn McCall said.

Shares in easyJet, which have risen 12 per cent in the past three months, were up 7 per cent at 432.2 pence by 0845 GMT, valuing the company at around £1.7 billion. "Carolyn McCall's second full year in charge is off to a good start, helped by the mild winter weather. Both pricing and cost control have been strong," said Douglas McNeill, analyst at Charles Stanley Securities, who retains a "hold" rating on the stock.

Battered by fuel costs

EasyJet's European peers have struggled to overcome high oil prices and sluggish demand in recent months, with low-cost airlines expected to pick up more business.

German group Lufthansa and Air France-KLM have cut profit forecasts after being battered by fuel costs and slashed plans to expand in 2012.

McCall said she was "cautiously confident" in the outlook for the business, despite the tough economic environment and the negative impact of a weak euro. Last year, easyJet agreed a string of deals aimed at giving it a larger share of the business travel market.

The airline said some 200,000 more business passengers flew with the carrier in the quarter year-on-year.

EasyJet, the largest airline at London's Gatwick airport, expected to grow seats flown by around 3 per cent for the first half and by around 5 per cent for the full year.