EasyJet Share Price Gapped Up 6.7% on Upbeat Q1 FY24 Results

The easyJet plc (LON: EZJ) share price gapped 6.7% after announcing its fiscal trading update for the quarter ending 31 December 2023. The budget airline reported a Q1 headline loss before tax of £126 million compared to a loss of £133 million in Q1 2023.

The airline noted that its passenger numbers grew 14% year-on-year, while revenues per seat (RPS) rose 3% compared to last year. The airline's load factor fell by one percentage point, while its cost per seat (CPS), excluding fuel, was down 3% compared to last year. 

The company said that it expects its H1 losses to be narrower than last year despite a £40 million direct cost from the Middle East conflict. The firm also expects its Q2 revenue per seat (RPS) to rise by the mid-single-digits. 

easyJet has reported a notable improvement in its financial results for the first quarter, surpassing its performance in the same period last year. This improvement is even more pronounced when considering the underlying progress of the business. 

However, the company faced challenges due to the conflict in the Middle East that began on October 7, leading to a temporary suspension of flights to Israel and Jordan, a decision that remains in effect. This situation also caused a brief slowdown in flight bookings industry-wide.

Despite these challenges, demand and bookings for easyJet rebounded robustly in late November. The company's holiday segment experienced a robust quarter, with customer numbers surging by 48% compared to the previous quarter and profits soaring to £30 million, a remarkable 131% increase year-over-year.

For the first half of the financial year 2024, easyJet anticipates a reduction in its seasonal winter losses compared to the previous year. This expectation holds despite the estimated direct impact of around £40 million from the Middle Eastern conflict and additional indirect consequences. 

The anticipated improvement is attributed to the airline's strategic capacity growth in high-demand areas and gains in productivity. easyJet also forecasts that the cost per seat, excluding fuel, will remain relatively stable in the first half of 2024, though fuel costs are expected to rise by approximately 7%.

EasyJet share price. 

The EasyJet share price gapped 6.47% to trade at 538.1p from Tuesday’s closing price of 505.4p.