British low cost carrier EasyJet PLC expects to earn more than its pretax profit expectations for the fiscal year, mainly due to increased number of travelers and higher fares.
EasyJet, which is known for its cost cutting measures, expects above GBP150 million in pretax profits for the year to Sept. 30. Its previous expectations were between GBP100 million and GBP150 million in pretax earnings.
The company benefited from costlier ticket prices that contributed to higher revenues per seat, which is up to 6% higher than the same period last year when computed on constant currency basis. The company has seen increased bookings on the intercontinental routes in Europe and beach and city destinations.
There were concerns about the company's losses during the Iceland volcano ash problem in April but the company reduced its cost estimate to GBP60 million from its previous estimate of GBP65 million.
EasyJet carried upwards of 4.7 million passengers in September, which is an 8% boost from the 4.4 million passengers it carried last year. The total Load factor, which is actually the estimation of the proportion of seats with paying passengers, saw an increase of 1.2 percentage points to 89.3%.
Despite the positive outlook, the company has struggled in recent months. Its founder Stelios Haji-Ioannou, who with his family owns 38% of the company shares, had a scuffle with the board that resulted in some resignations. Crew shortages and ineffective rostering on some routes cost the company GBP 15 million.
The International Air Transport Association, or IATA, has also revised its industry outlook for 2010, with expected global profits of $8.9 billion, up from $2.5 billion expected in the previous forecast.
