EasyJet sees H1 losses narrowing despite £40m hit from MEast war

(Sharecast News) - Budget airline easyJet said it had taken a £40m hit from the Middle-East conflict, but said it expected first-half losses to narrow and reported positive booking momentum for the summer. The airline was forced to suspend flights to Israel and Jordan after the Hamas Islamic group attacked Israel last October, with demand also softening on its routes to Egypt.

Pre-tax losses for the three months to December 31 came in at £126m from £133m a year earlier. Revenues were up 16% to £1.1bn.

"Although still early, bookings for summer 2024 are building well, with the turn of the year bookings period showing an increase in both volume and pricing compared to the same period last year," the company said.

"This positive momentum is also evident in the holidays business, where we continue to expect customer growth to exceed 35% year-on-year."

EasyJet's holiday division posted a profit of £30m for the quarter, up from £13m in the same period last year.

"Flight and holidays bookings took off strongly during the traditional busy turn of year sales period, as customers opted to secure their summer holidays to firm favourites like Spain and Portugal alongside destinations further afield like Greece and Turkey," the airline said.

Richard Hunter, head of markets at Interactive Investor, said easyJet's recovering fortunes had been reflected in its share price, which has risen by 13% over the last year, as compared to a drop of 4.3% for the wider FTSE 250 index.

"Indeed, a bounce of 39% in the last three months alone has provided some momentum, although in terms of the price there is still some way to go, with the shares remaining down by 25% over the last three years. Nonetheless, there seems to be an increasing band of followers for the company and its profit potential, with the market consensus of the shares recently having ticked up to a 'buy'."

Reporting by Frank Prenesti for Sharecast.com