EasyJet winter bookings rise as competition heats up

Easy Jet

LONDON: British low-cost airline easyJet has 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 pounds ($909 million) for the year ended Sept. 30, in line with an upgraded forecast it made last month. Cheap fares have helped easyJet and rival Ryanair win market share in Europe’s short-haul travel sector from traditional airlines such as Air France-KLM and Lufthansa, 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,” said Hargreaves Lansdown head of equities Richard Hunter.

EasyJet’s shares, however, fell 1 percent to 1,530 pence by 1035 GMT, after soaring 18 percent over the past three months.

“There’s nothing in there for the bulls to keep pushing the share price,” Panmure analyst Gert Zonneveld said.

EasyJet, 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.

Almost half of seats were now booked for winter, slightly ahead of last year, it said, adding it would grow capacity, measured in seats flown, by around 3.5 percent in the first half of its new financial year.

EasyJet is facing competition across the board. While Air France, for example, expands low-cost unit Transavia, Ryanair is 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 profit forecast this month.

EasyJet said it would lift its ordinary dividend per share by 35.5 percent to 45.4 pence, in line with a proposal made earlier this year to reward shareholders with a higher proportion of profit.

Some analysts had suggested the company, which announced a special dividend in 2013 and 2011, could do the same this year.

Chief executive Carolyn McCall told reporters that was under review.

“We’re not saying that we won’t do a special dividend, it’s just about the timing,” she said.

 
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