Easyjet share price nosedives despite solid performance
A warning on impending cost increases sent easyJet’s stock falling 4.5 per cent on Tuesday morning trading despite a solid fourth quarter performance which kept the Luton-based airline on track to hit its financial forecasts.
easyJet reported robust customer demand and the delivery of self-help initiatives driving outperformance in both passenger and ancillary revenue per seat.
The carrier expects to deliver Full Year 2019 headline profit before tax of between £420 million and £430m. This is in the upper half of the previous guidance range.
Passenger numbers for the full year increased by 8.6 per cent to 96 million, driven by an increase in capacity of 10.3 per cent to 105m seats. Load factor for the full year will decrease by 1.4 percentage points to 91.5 per cent.
Total headline cost for the full year will increase by circa 12 per cent due to increased capacity, higher unit fuel costs and adverse foreign exchange movements. This increase was partially offset by improvements in cost per seat ex-fuel.
easyJet’s total fuel cost for Full Year 2019 is expected to be around £1.42 billion, which includes an adverse impact of foreign exchange and increased Emissions Trading System costs.
Total headline foreign exchange will have a year-on-year adverse impact of around £14m.
Q1 2020 forward bookings are currently in line with the same time last year and expected capacity growth for full year 2020 will be at the lower end of the airline’s historic range.