EasyJet's chief executive said today the budget airline was not seeing any signs of softening demand and fares were holding up, as its quarterly report and upbeat outlook for its holidays business reassured investors and sent shares 8% higher.
EasyJet's third-quarter report was in contrast to Ryanair's warning on Monday of deteriorating ticket prices, which sent chills across the European airline industry, deepening fears of a weak summer.
Shares in EasyJet, which have lost 16% of their value so far this year, rose 8% in early trade after it also reported a 16% rise in pretax profit in the April-June quarter and said it was on track for a record summer.
Its stock, which had been battered by Ryanair's warning on Monday, was the biggest gainer on the FTSE 100 and among the top in the pan-European index this morning.
"You will have some parts of the network and some flights that are cheaper than last year, but some would be slightly more expensive," CEO Johan Lundgren told journalists.
"But on average, the fare environment is very similar to what we saw last year," he said.
Airline executives at the Farnborough Airshow on Monday said the post-pandemic boom in air travel has normalised as travellers baulk at higher fares, after Ryanair posted a profit slump and warned ticket prices were continuing to deteriorate.
Lundgren said it was difficult to comment on the comparisons with Ryanair since EasyJet operates head-to-head with the Irish airline on only 20% of its network.
"Given the Ryanair commentary this week on a large weakening in demand/pricing, the outlook for peak summer from (easyJet) appears to be 'ok' given the market has been expecting the worst," JPMorgan analysts said in a note.
Expectations for pricing to hold up in the peak summer quarter were reassuring, they said.
EasyJet said its airline revenue per seat for the quarter was up 1% and the trend is expected to continue into the fourth quarter, with final quarter bookings 69% sold.
The London-listed airline lifted its profit forecast for EasyJet holidays to more than £180m in the full year from a previous expectation of £170m.
Launched in 2019, EasyJet holidays, which accounted for more than a quarter of group pretax profit last year, offers travel packages and encourages customers travelling on leisure to spend more with the airline.
EasyJet said it was a step closer to achieving its medium-term targets.
Lundgren, whose plans to leave next year sent EasyJet stock tumbling in May, has focussed on cutting debt and restoring revenues after the pandemic.
The low-cost carrier posted headline pretax profit of £236m for the three months ended June 30, up from £203m reported a year earlier.
