Mild Weather and Fee Hikes Boost Trading for easyJet | Prepaid365

Powered by PFS
26 March 2012

Tags: , , , ,

The mild winter weather this year has led to a trading boost for easyJet, the low cost carrier has announced.

Winter has been unseasonably mild this year, which has led to far fewer flight cancellations for the majority of airlines.

Low-cost carrier easyJet has announced that the mild weather, along with a number of other factors, has driven it to reduce its loss expectations for the first half of the financial year.

Many travel businesses often record a loss in the first half of the year, as the majority of travel revenue is generated throughout the summer and into autumn. easyJet is no different, but has enjoyed a far more positive start to 2012 compared to recent years.

The airline now expects a pre-tax loss of between £110 million and £120 million for the six months ending on 31 March this year.

This is a reduction in easyJet’s previous loss expectation, which was between £140 million and £160 million. It is also a marked improvement on the first half of last year, when the airline recorded a loss of £153 million.

As well a huge drop in flight cancellations, the warm weather also contributed to lower costs for easyJet. The airline has said that disruption and de-icing costs were £18 million lower this year than in 2011.

“Although the economic environment remains weak, easyJet’s strategy of affordable fares and our focus on making it easy for our customers ensures that easyJet is well positioned to deliver good results for shareholders,” said Carolyn McCall, easyJet’s Chief Executive.

“We continue to expect the environment for airlines to remain difficult. We will continue to deliver for our customers, focus on operational excellence, manage our costs tightly and allocate our capacity to the markets that will deliver the best financial return,” she added.

The airline also reported an increase in revenue from seat sales. It said that the revenue it earns per seat has gone up by 10% in the past six months.

But at least half of this increase comes from extra costs to passengers, with fees and charges (including credit and debit card fees) for passengers travelling with easyJet both increasing.

The airline has increased its first-bag charge by 16.9%, to £4.70 per seat, while total fees and charges for passengers went up by 26.7% to £5.88 per seat.

Holidaymakers may be facing ever-increasing charges from airlines, but savings can still be made on holiday. Investing in a prepaid travel money card is a good way to avoid high bank charges for foreign card use, while also achieving a good exchange rate.

Comments are closed.

Want to find out more about corporate travel cards?

Get in touch