EasyJet expects profits to soar past the £200m mark as revenues rise

INVESTORS can look forward to higher full-year profits at EasyJet after the budget airline yesterday raised its guidance thanks to a boost in business travel.

The carrier said it had now sold 75 per cent of its seats for the key summer season and expects full-year pre-tax profits of between 200 million and 230m. Analysts had been expecting an average of just over 180m.

Luton-based EasyJet, known for its bold orange livery, posted revenue of 935m for the three months to the end of June, up 23 per cent on a year earlier.

As well as a 20 per cent hike in the number of business travellers during the quarter, sales were boosted by an increased number of flights. Ancillary revenues - which include charges to check in bags - rose 17 per cent per seat to 11.65.

The airline, which acted last year to lure more corporate passengers through a new fare structure, described the outlook as positive.

However, it warned that its profits estimates could be affected by changes in the price of jet fuel. A movement in price of $50 per tonne could have a 7m impact on pre-tax profits.

Wyn Ellis, an analyst at Numis Securities, said the results were "very encouraging, and the revenue performance, in the face of a difficult macro-economic environment, remarkably strong".

He added that his main worry was the position of founder Sir Stelios Haji-Ioannou, who has criticised the company for its plans to buy more planes.

Ellis said: "Investors will hope that some of his concerns may now be allayed and that he will allow management to get on with running the business without undue interference."

Earlier this month, Stelios, whose family controls about 38 per cent of the shares, said he wanted to force a shareholder vote over the airline's plans to buy new aircraft from Airbus, resuming a long-running dispute with the company he set up.

EasyJet said it had benefited from the launch of a flexible fare targeted at business travellers that gives passengers the option of changing their flight up to two hours before the scheduled departure time. The airline is looking to diversify its offer away from the budget end of the tourist market.

It said it carried 14.4 million passengers in the quarter, up 17.3 per cent, while its load factor - a measure of how well it sells available seats - rose 0.2 of a percentage point to 86.3 per cent.

Last year, the airline announced it would pay its maiden dividend in January 2012 after full-year profits nearly trebled to 154m. Yesterday, it said there was a possibility that the payment could be increased above the level initially proposed, depending on the full-year performance.