LONDON: EasyJet’s CEO said on Wednesday the budget airline was not seeing any signs of softening demand and fares were holding up, as its quarterly report and upbeat outlook for its holidays business reassured investors and sent shares 8 percent higher. EasyJet’s third-quarter report was in contrast to Ryanair’s warning on Monday of deteriorating ticket prices, which sent chills across the European airline industry, deepening fears of a weak summer. Shares in easyJet, which have lost 16 percent of their value so far this year, rose 8 percent in early trade after it also reported a 16 percent rise in pretax profit in the April-June quarter and said it was on track for a record summer.

Its stock, which had been battered by Ryanair’s warning on Monday, was the biggest gainer on the FTSE 100 and among the top in the pan-European index on Wednesday. “You will have some parts of the network and some flights that are cheaper than... last year, but some would be slightly more expensive,” CEO Johan told journalists.

“But on average, the fare environment is very similar to what we saw last year.” Airline executives at the Farnborough Airshow on Monday said the post-pandemic boom in air travel has normalized as travelers baulk at higher fares, after Ryanair posted a profit slump and warned ticket prices were continuing to deteriorate. Lundgren said it was difficult to comment on the comparisons with Ryanair since easyJet operates head-to-head with the Irish airline on only 20 percent of its network. “Given the Ryanair commentary this week on a large weakening in demand/pricing, the outlook for peak summer from (easyJet) appears to be ‘ok’ given the market has been expecting the worst,” JPMorgan analysts said in a note. 

Expectations for pricing to hold up in the peak summer quarter were reassuring, they said. Airline revenue per seat for the quarter was up 1 percent and the trend is expected to continue into the fourth quarter, easyJet said, with final quarter bookings 69 percent sold.

The London-listed airline lifted its profit forecast for easyJet holidays to more than 180 million pounds in the full year from a previous expectation of 170 million pounds. easyJet said it was a step closer to achieving its medium-term targets. Lundgren, whose plans to leave next year sent easyJet stock tumbling in May, has focused on cutting debt and restoring revenues after the pandemic. He launched easyJet holidays in 2019 to boost spending with the airline. The low-cost carrier posted headline pretax profit of 236 million pounds for the three months ended June 30, from 203 million pounds reported a year earlier. – Reuters