EasyJet cuts losses with increased baggage charge

Airline predicts £50m narrower loss than forecast on six months to 31 March.

EasyJet narrows loss predictions
Carolyn McCall, CEO of British low-cost airline EasyJet. Photograph: Getty Images

EasyJet, the largest British airline by passenger numbers, has said its half year pre-tax losses will be smaller than earlier predicted.

The Luton-based company, which operates over 500 routes between 118 airports in Europe, Africa and Asia, has forecast a loss for the six months to 31 March of £100m to £120m; far lower than the £153m loss in the same period last year. Previously, the half-year loss to this month's end was predicted at £140m to £160m. In a statement the company said:

In a difficult environment for all airlines, improvements in revenue management combined with marketing and website initiatives have enabled EasyJet to take advantage as weaker competitors have left the market over the last couple of months.

EasyJet reported revenue growth of 10 per cent per passenger seat, with half of that coming from higher fees and travel charges. Unseasonably mild weather over the autumn and winter also contributed to particularly low flight cancellation numbers.

So far this year, the company raised passenger charges for one piece of luggage by 16.9 per cent to £4.70 per seat, and increased the fees overall -- including baggage charges -- by 26.7 per cent per passenger, to £5.88. De-icing and disruption costs were £18m lower this year than last.

EasyJet shares were up 7.5 per cent on Monday's statement. Wyn Ellis, an analyst at Numis, said this morning:

We continue to be impressed with EasyJet's operational and financial performance in a difficult market environment and it is emerging as a very clear winner in the aviation market in Europe.