EasyJet shares fly higher despite profit turbulence
EasyJet shares jumped by more than 3% after the airline reported headline pre-tax profit of £427m (€498m), in line with guidance.
That was down 26% from last year because of rising fuel prices and a tough operating environment.
The airline said that forward bookings for the first half of the 2020 financial year were “reassuring” and slightly ahead of last year.
EasyJet has said that uncertainty around the original Brexit date of March 29 affected trading in the first half of this year, but chief executive Johan Lundgren said he does not expect the revised Brexit date of January 31 to have the same impact.
“The situation has almost normalised,” he said. “People ... have lived with the fact that the deadline has been moved and people in a way are getting on with their lives.”
Analysts said consensus estimates for 2020 are unlikely to change, with upgrades of 5%-7% from a better pricing environment being “masked” by the spend on carbon offsetting.
EasyJet said it is implementing plans to become the world’s first major airline to operate with net-zero carbon across its flight network.
In addition to the plans to offset emissions from flying, the company also announced that it would launch EasyJet Holidays in Britain by Christmas, offering its own beach and city breaks after the demise of tour operator Thomas Cook.
The carbon offset programmes will cost about £25m (€29.2m) a year, with the offsetting starting immediately, it said.
Airlines have come under increasing pressure to reduce emissions in the face of the growing “flight shame” movement.
“People are increasingly looking for companies to reduce their footprint on the environment, and this is an interim step,” Mr Lundgren said.
Aer Lingus and British Airways owner IAG has said it will carbon-offset its domestic flights, with international airlines collectively counting on a global carbon offsetting plan to cap CO2 emissions from air travel at 2020 levels.
Mr Lundgren said that EasyJet’s net-zero carbon plan was more cost-effective than if passengers took it upon themselves to offset their flights individually.
