easyJet shares rise as passenger numbers take off and losses fall in first half

Easyjet shares were on the rise on Thursday after the airline said most major performance metrics improved in the six months to March 31st.

Passenger numbers were up 8% and ticket yields increased 9%. Losses were much improved despite the disruption caused by the Middle East conflict.

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“Disruption in the Middle East has led to a £40mn direct impact for easyJet in the first half. Flying into Israel has been suspended for the summer. In true easyJet fashion, the group’s been able to flex its unexpected capacity to other areas, and has still been able to reduce losses compared to the previous year,” said Sophie Lund-Yates, lead equity analyst, Hargreaves Lansdown.

Airlines almost always lose money in the winter months and focus on earning profits in the summer. Managing the losses in the winter months and securing strong summer bookings is key to the business model. easyJet has done just that.

Winter losses before tax improved by more than £50m and summer bookings are ahead of last year after a strong Easter trading period.

“Narrowed first-half losses can be chalked up as a result for EasyJet – given the inherent seasonality of holidays means airlines often lose money in the winter months and make up for that over the summer,” said Russ Mould, investment director at AJ Bell.

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“True, these figures were somewhat obscured by the timing of Easter but on the flipside the company also took a hit relating to the conflict in the Middle East.

“Consumers still seem to be willing to prioritise travel with the disposable income they have and by boosting capacity and rolling out its package holidays venture, EasyJet has positioned itself to take advantage of this trend.

“At what point people’s willingness and ability to spend money on a week in the sun dries up remains to be seen and this, along with pressures around the industry’s environmental impact, are the obvious clouds on an otherwise sunny horizon for EasyJet.”

easyJet shares were 2.2% higher at the time of writing.

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