REG-easyJet plc Trading Update for the six months ended 31 March 2023

easyJetAnnouncement

18/04/2023 07:15

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   easyJet plc (EZJ)
   Trading Update for the six months ended 31 March 2023

   18-Apr-2023 / 07:00 GMT/BST

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   18 April 2023

                                        

                                  easyJet plc

                                  (‘easyJet’)

                                        

         easyJet Trading Update for the six months ended 31 March 2023

                                        

   easyJet improves its first half performance by >£120 million year on year
       and expects to exceed FY23 market expectations1, driven by network
   transformation, improved revenue capability and strong demand. Easter saw
     a robust operational performance with booking momentum continuing into
                                     summer

     • Continued revenue growth through Q2

          ◦ Passengers2 +35% YoY
          ◦ RPS +43% YoY

               ▪ Load factor +10 ppts YoY
               ▪ Ticket yield +31% YoY
               ▪ Ancillary yield +16% YoY

     • Robust Easter operations

          ◦ Around 1,600 flights per day
          ◦ 99.8% of planned flights operated despite impact from French ATC
            strikes

     • Strong bookings continue into summer 2023

          ◦ Q3 Airline RPS expected to be around +20% YoY
          ◦ easyJet holidays further upgrades growth expectations to c. 60%
            YoY

     • Capacity

          ◦ H2 c.56m seats, c.9% increase YoY

               ▪ Q3 Capacity c.26m - +7% YoY
               ▪ Q4 capacity around pre-pandemic levels – network capacity
                 +8% vs pre pandemic excluding Berlin rightsizing

     • Whilst we remain mindful of the uncertain macroeconomic outlook across
       the globe, based on current high levels of demand and strong bookings,
       easyJet anticipates exceeding current market profit expectations of
       £260 million for FY23

    

   Summary

   easyJet reduced its first half “seasonal” losses significantly year on
   year, driven by self-help measures including network optimisation,
   improved ancillary products, and a continued cost focus which allow us to
   fully benefit from strong levels of demand. Headline loss before tax for
   the first half is expected to be between £405 and £425 million. This
   result is despite challenges from elevated fuel prices, market wide
   inflation and costs associated with building resilience into the operation
   ahead of summer 2023.

    

   easyJet has ramped up capacity throughout the quarter, growing 40% from
   January to March. This growth will continue into peak summer where easyJet
   will be back to around pre-pandemic levels of capacity, with the network
   seeing growth of around 8% when excluding the Berlin rightsizing. easyJet
   is fully resourced ahead of this ramp up after successfully completing its
   largest ever crew onboarding campaign. The attractiveness of easyJet’s
   brand continues to be a differentiator, with applications received being
   over 8 times the number of roles recruited.  

    

   Easter demand has been strong with around 1,600 flights operating on
   average per day with robust operational performance achieved. Capacity
   over Easter, in the UK, was back around pre pandemic levels, with strong
   demand and positive yield growth compared to Easter 2019. Disruption from
   French ATC strikes continued to be seen through April, though easyJet’s
   investment into resilience will help mitigate its impact.

    

   easyJet holidays continues to benefit from strong UK demand, further
   upgrading its growth expectations to c.60% year on year (previously 50%).
   easyJet holidays is currently 80% sold for this summer.

    

   Johan Lundgren, CEO of easyJet, said:

   “Demand for easyJet’s flights and holidays has continued to grow in the
   half, resulting in more than a £120 million pound improvement in our
   performance as well as a billion pound revenue improvement year on year.
   This is further enhanced by our transformed network of popular
   destinations and improved revenue capability.

    

   “We see continued strong booking momentum into summer as customers
   prioritise spending on travel and choose airlines like easyJet offering
   the best value and destination mix, as well as easyJet holidays which is
   continuing its steep growth trajectory as the fastest growing holidays
   company in the UK. 

    

   “All of this means easyJet expects to outperform FY23 market
   expectations.”

    

   Capacity

   During Q2 easyJet flew 17.7 million seats, in line with guidance, a
   significant increase on the same period last year when easyJet flew 14.8
   million seats. Load factor was 88% (Q2 FY22: 78%), due to increased
   customer demand coupled with restriction-free travel.

    

   Passenger2 numbers in the quarter increased to 15.6 million (Q2 FY22: 11.5
   million).

    

                                                       March     Q2     Q2
                           January 2023 February 2023
                                                        2023   FY23   FY22
   Number of flights             27,716        32,844 38,713 99,273 82,247
   Peak operating aircraft          264           265    267    267    272
                                                                          
   Passengers 2 (thousand)        4,185         5,221  6,225 15,631 11,545
                                                                          
   Seats flown (thousand)         4,933         5,856  6,903 17,692 14,844
                                                                          
   Load factor 3                    85%           89%    90%    88%    78%

    

   Revenue, Cost and Liquidity

   Total group revenue and headline costs for the first half are expected to
   be around £2,690 million and around £3,105 million respectively. Pricing
   remained strong during the first half for both ticket and ancillary
   revenue, demonstrating the continued success of easyJet’s network
   optimisation and ancillary products. Significant fuel price increases year
   on year and the strengthened USD have resulted in sterling fuel cost per
   seat being +71% (+£8.49) vs the same period last year. One-off costs were
   incurred during the first half as 15 wet leased aircraft utilised in
   summer 22 only left the fleet at the end of October.

    

   easyJet continues to have one of the strongest, investment grade, balance
   sheets in european aviation. As at 31 March 2023 our net debt position was
   c.£0.2 billion (31 December 2022: £1.1 billion). During February 2023, a
   €500 million bond was repaid upon maturity.  

    

   Financing costs benefitted from the strengthening of sterling versus the
   USD over the quarter which has driven a non-operating, non-cash FX gain of
   circa £27 million (H1 22: £2 million gain) from balance sheet
   revaluations. 

    

   (£’m)                                        Low  High
   H1 23 Group headline EBITDAR range          (80)  (60)
   H1 23 Group headline EBIT range            (405) (385)
   H1 23 Group headline loss before tax range (425) (405)

    

                                                                     Variance
   H1 23 numbers are circa and rounded to the      H1’23   H1’22
   middle of the range provided above                            Favourable /
                                                                 (Adverse)
   Passenger revenue (£’m)                         1,750     985          78%
   Airline ancillary revenue (£’m)                   765     458          67%
   Holidays revenue4 (£’m)                           175      55         218%
   Group revenue (£’m)                             2,690   1,498          80%
   Fuel costs (£’m)                                (770)   (362)       (113)%
   Airline headline EBITDAR costs ex fuel (£’m)  (1,825) (1,287)        (42)%
   Holidays EBITDAR costs4 (£’m)                   (165)    (57)       (117)%
   Group headline EBITDAR costs (£’m)            (2,760) (1,706)        (62)%
   Group headline EBITDAR (£’m)                     (70)   (208)          66%
   Group depreciation & amortisation (£’m)         (325)   (278)        (17)%
   Group headline EBIT (£’m)                       (395)   (486)          19%
   Financing costs excluding balance sheet          (47)    (61)          26%
   revaluations (£’m)
   Balance sheet revaluations (£’m)                   27       2       1,150%
   Group headline LBT (£’m)                        (415)   (545)          24%
                                                                             
   Airline passenger revenue per seat (£)          46.24   32.49          42%
   Airline ancillary revenue per seat (£)          20.22   15.12          34%
   Total airline revenue per seat (£)              66.46   47.61          40%
                                                                             
   Airline headline cost per seat ex fuel (£)    (57.16) (53.47)         (7)%
   Airline fuel cost per seat (£)                (20.43) (11.94)        (71)%
   Airline headline total cost per seat (£)      (77.59) (65.41)        (19)%
                                                                             
   Sector length (km)                              1,192   1,131           5%
                                                                             
   Cash and money market deposits (£’bn)             3.5     3.5            -
   Net debt (£’bn)                                   0.2     0.6          67%

    

    

   Fuel & FX Hedging (as at 14.04.23)

   Jet Fuel               H2'23 H1'24   USD                       H2'23 H1'23
   Hedged position         69%   43%    Hedged position            74%   51%
   Average hedged rate    $896  $890    Average hedged rate       1.24  1.21
   ($/MT)                               (USD/GBP)
   Current spot ($/MT) at   c. $820     Current spot (USD/GBP) at   c. 1.25
   14.04.23                             14.04.23

    

   For further details please contact easyJet plc:

   Institutional investors and analysts:

   Michael Barker  Investor Relations  +44 (0) 7985 890 939

   Adrian Talbot   Investor Relations  +44 (0) 7971 592 373

    

   Media:   

   Anna Knowles  Corporate Communications +44 (0) 7985 873 313

   Edward Simpkins FGS Global     +44 (0) 7947 740 551 / (0) 207 251 3801

   Dorothy Burwell FGS Global    +44 (0) 7733 294 930 / (0) 207 251 3801

   A copy of this Trading Statement is available at
    1 http://corporate.easyjet.com/investors

    

   1) Current market profit expectations, as per company compiled consensus
   is a £260 million PBT for FY23 (as at 14.04.23).

   2) Represents the number of earned seats flown. Earned seats include seats
   which are flown whether or not the passenger turns up, as easyJet is a no
   refund airline and once a flight has departed, a no-show customer is
   generally not entitled to change flights or seek a refund. Earned seats
   also include seats provided for promotional purposes and to staff for
   business travel.

   3) Represents the number of passengers as a proportion of the number of
   seats available for passengers. No weighting of the load factor is carried
   out to recognise the effect of varying flight (or "sector") lengths.

   4) easyJet holidays numbers include elimination of intercompany airline
   transactions

    

   This announcement may contain statements which constitute 'forward-looking
   statements'. Although easyJet believes that the expectations reflected in
   these forward-looking statements are reasonable, it can give no assurance
   that these expectations will prove to have been correct. Because these
   statements involve risks and uncertainties, actual results may differ
   materially from those expressed or implied by these forward-looking
   statements.

    

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   Dissemination of a Regulatory Announcement, transmitted by EQS Group.
   The issuer is solely responsible for the content of this announcement.

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   ISIN:          GB00B7KR2P84
   Category Code: TST
   TIDM:          EZJ
   LEI Code:      2138001S47XKWIB7TH90
   Sequence No.:  237440
   EQS News ID:   1609663


    
   End of Announcement EQS News Service

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