EasyJet Shares Slide Despite Narrower Q1 Loss

EasyJet (LON: EZJ) shares fell more than 3% on Wednesday, despite the airline reporting a 52% year-on-year reduction in its first-quarter headline loss before tax. 

The low-cost airlines's loss narrowed to £61 million from £126 million a year earlier as demand for flights and package holidays improved.

EasyJet shares are currently trading around the 494.2p mark. However, the stock has recovered slightly from 483.7p, which it traded around at the beginning of the session. 

The carrier reported that passenger numbers rose 7% to 21.2 million during the quarter, with capacity up 11%. 

The load factor increased to 88.2%, up from 86.3% a year earlier, as EasyJet flew more passengers across its network. 

Revenue for the quarter grew 13% year-on-year to £2.04 billion, bolstered by a 36% increase in holiday revenue to £247 million. EasyJet Holidays contributed £43 million in profit, up £12 million from the previous year.

Fuel costs fell 3% year-on-year, and total cost per seat decreased 2%, driven by improved efficiency and lower fuel costs. 

EasyJet said forward bookings for the traditionally strong Easter and summer seasons showed positive trends, with 57% of Q2 and 26% of Q3 already sold.

Despite the operational improvement, EasyJet warned of headwinds, including a seasonal dip in revenue in Q2, as the company continues to invest in capacity. 

The airline maintained its full-year guidance, expecting 8% available seat kilometers (ASK) capacity growth and progress toward its medium-term target of over £1 billion in pre-tax profit.

“EasyJet performed well,” said CEO Kenton Jarvis. “Looking to this summer, we have seen continuing demand for easyJet's flights and holidays where we have one million more customers already booked.”

He added: “All of this demonstrates positive progress towards our medium term target to deliver more than one billion pounds of profit before tax.”