Despite increased disruption in European markets , easyJet has increased profit guidance for the year. Having previously expected pre-tax profits of £530m to £580m, the group now expects to make £550m to £590m.
The shares rose 4% on the news.
George Salmon, Equity Analyst at Hargreaves Lansdown: “Intense price competition has caused easyJet to endure a turbulent time over the last few years.
However, easyJet says capacity from the collapse of Monarch remains unfilled, which hints that the overcapacity headwinds that have plagued the sector might be starting to ease.
Reduced competition is a clear positive, but trends in the wider market are out of easyJet’s control. We think the results it’s starting to deliver from self-help measures, such as the dramatic increase in ancillary revenues, are particularly encouraging.
It’s not quite a full house though. Operating costs and start-up losses from the recently acquired Air Berlin services are both higher than expected. These areas will likely be the focus for new CEO Johan Lundgren.”