EasyJet has announced a 16% increase in pre-tax profits for the third quarter, ending 30 June, highlighting strong demand for summer travel. This stands in stark contrast to rival Ryanair, which reported a 46% drop in profits for the same period.
The contrasting performances paint a picture of a split outlook for the summer travel season. While Ryanair cites last-minute bookings and a portion of Easter travel falling into the previous quarter as contributing factors to their decline, EasyJet is celebrating a surge in ticket sales and strong demand during peak summer months.
EasyJet's CEO, Johan Lundgren, attributed their success to their "unrivalled network of destinations and value for money," stating that the company is "on track to deliver another record-breaking summer."
Despite the positive news from EasyJet, the wider airline industry is facing headwinds. Air France-KLM has reported that its revenue will be impacted by tourists postponing holidays due to the upcoming Paris Olympics. Other carriers, including Lufthansa and Delta Air Lines, have also warned of pressure on fares.
Despite the challenging market, both Ryanair and EasyJet have managed to maintain strong load factors, with Ryanair reporting a 94% occupancy rate and EasyJet at 90%. While Ryanair expressed concerns about consumers being "frugal" and resisting higher fares, EasyJet reported that fares remain resilient.
EasyJet's decision to launch a package holiday arm in 2019 is proving to be a shrewd move. This diversification has created broader revenue streams and is growing rapidly. Investors are clearly putting their trust in the brand, evidenced by EasyJet's share price rising 5.2% following the announcement.
The upcoming earnings release from Hungarian Wizz Air will provide further insight into the contrasting early-summer performance of these low-cost carriers.
The contrasting fortunes of Ryanair and EasyJet highlight the ongoing battle for dominance in the budget airline market. While Ryanair faces a challenging summer, EasyJet is poised to capitalize on the strong demand for summer travel, suggesting that the battle for market share will continue to be fiercely contested in the months ahead.
