News

easyJet Reports Record Financial Performance

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4.9

Andrew R. Michaud

• October 12, 2023

easyJet, the low-cost carrier, has announced its exceptional financial performance over the summer, paving the way for the resumption of dividends. The company is also optimistic about its future prospects, expecting a rise in headline pretax profit for the fourth quarter of fiscal 2023 due to the sustained strong demand.

Meeting New Targets

With the momentum of bookings carrying over into fiscal 2024, easyJet has set new medium-term targets. The airline aims to achieve a remarkable pretax profit per seat of approximately £7 to £10 ($8.62 to $12.31). To achieve this, they plan to minimize winter losses, expand their capacity and modernize their fleet. Additionally, easyJet intends to enhance its easyJet holidays offering.

Positive Indicators

easyJet reported that its ticket yields have shown improvement compared to the previous year, while their load factors remain consistently high. During the period, the fourth-quarter load factor remained steady at 92%. Looking ahead, easyJet projects a 15% increase in capacity for the first quarter of fiscal 2024 compared to the previous year.

EasyJet to Purchase Additional Airbus Airplanes

EasyJet, the renowned airline company, has recently announced its plan to expand its fleet by acquiring 157 new Airbus airplanes. The company has also secured an additional 100 purchase rights, which demonstrates its commitment to future growth. With an approximate investment of $19.9 billion spread over several years, EasyJet aims to bolster its operations significantly. It's important to note that the actual price for these aircraft is anticipated to be substantially lower due to price concessions provided by Airbus. However, this purchase is still subject to shareholder approval.

Driving Profit and Achieving Goals

EasyJet has emphasized that these aircraft acquisitions align perfectly with its long-term vision and strategic objectives. In their statement, they expressed how integral these targets are for them in achieving a pre-tax profit of more than GBP1 billion. This substantial milestone will undoubtedly solidify EasyJet's position as a dominant force in the airline industry.

Financial Expectations

For the quarter ended on September 30th, EasyJet anticipates a headline pre-tax profit between GBP650 million and GBP670 million. This metric is crucial for the airline as it excludes exceptional and one-off items, providing a clearer picture of its operational performance. Looking ahead at the fiscal year, EasyJet expects the headline pre-tax profit to fall within the range of GBP440 million and GBP460 million. It's worth mentioning that the consensus estimate for the headline pre-tax profit currently stands at GBP463.3 million, based on forecasts from 10 analysts sourced from FactSet. Furthermore, the company experienced a headline pre-tax loss of GBP178 million in fiscal year 2022.

Projected Revenue

In terms of revenue, EasyJet foresees an impressive figure of around GBP3.12 billion for the fourth quarter. Comparing this estimate with the fourth quarter of the previous fiscal year, which amounted to GBP2.52 billion, we can see substantial growth potential for the company.

EasyJet's recent announcements demonstrate its dedication to expansion, increasing profitability, and enhancing its overall market position. The airline industry eagerly awaits further updates on the shareholder approval and the subsequent purchase of the Airbus airplanes.

Future Dividend Expectations

The board of the company has recently announced its plans regarding the dividend payment. It is projected that the dividend payout for fiscal year 2023 will equate to 10% of the headline profit after tax. Moreover, this percentage is anticipated to increase to 20% in fiscal year 2024. These developments indicate a positive outlook for shareholders, as they can expect higher returns in the coming years.