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easyJet trading update and pre-close statement for the year to 30 September 2012

Outlook At as 25 July 2012 IMS Revised Outlook
Capacity growth 1 +7% +7%
Revenue per seat (constant currency) 1 Low to mid-single digits +5% to 5.5%
Cost per seat ex fuel (constant currency) 1 +1% to 2% +1.5% to 2%
Full year pre–tax profit (PBT) £280m to £300m £310m to £320m

Trading update for the twelve months ended 30 September 2012

easyJet’s commercial and operational performance continues to be robust across the network. Following the end of the Olympic games, demand from London increased towards the upper end of expectations with the late market and beach routes performing particularly well. As a consequence, revenue per seat at constant currency is likely to increase between 5% and 5.5% for the 6 months to 30 September 2012 compared to the previous guidance of “low to mid-single digits”.

In the 25 July IMS easyJet highlighted the operational challenges it faced from the Olympics and the steps it had taken to minimise disruption from both the games and the threat of industrial action in Europe. easyJet is pleased to confirm that there were very low levels of disruption through this critical summer period ensuring improved on-time performance and continued high levels of customer service. As a consequence, second half costs are likely to be in line with the guidance previously issued with a 1.5% to 2% increase in cost per seat excluding fuel at constant currency.

Due to the timing of the significant year on year change in the euro : sterling exchange rate there will be a material difference between constant currency and reported growth rates for both revenue and costs for the second half.  Reported revenue per seat growth is likely to be between 2% to 3%, whilst reported cost per seat excluding fuel will show a 2% to 3.5% reduction in cost.

As a result of easyJet’s better than expected late summer revenue performance and the benign operating environment, the Board’s revised expectation for a pre-tax profit for the 12 months ending 30 September 2012 is now between £310 million and £320 million compared with the previous expectation of a pre-tax profit of £280 million to £300 million.

Forward Bookings

A third of seats in the first quarter of the year ending 30 September 2013 have now been sold, in line with the prior year.

Hedging and costs

easyJet’s current hedging position is set out below:

Percentage of anticipated
requirement hedged
Fuel
requirement
US Dollar
requirement
Euro
surplus
Full year ending 30 September 2013

Average rate
77%

$985 m/t
80%

$1.60
65%

€1.18
Full year ending 30 September 2014

Average rate
54%

$994 m/t
60%

$1.58
45%

€1.22

It is estimated that at current fuel and exchange rates (2) easyJet’s unit fuel bill for the financial year 2013 is likely to increase by £30-40 million (3).  In addition, exchange rate movements are likely to have a further £40-60 million (3) negative impact in the 2013 financial year.

The near term economic outlook for Europe remains highly uncertain and easyJet also benefited from abnormally low levels of disruption in 2012. easyJet’s unit airport costs are expected to increase by around £80 million for the financial year 2013 due to significantly above inflation rises in charges at regulated airports, in Spain and Italy. Despite these headwinds easyJet’s focus on the customer, robust operational performance, the strength of the easyJet network combined with tight control of costs and capital discipline means that easyJet is well placed to continue to succeed.

Commenting on the pre-close statement, Carolyn McCall, easyJet’s Chief Executive said:

“easyJet has had a strong summer performance, which has enabled us to deliver another good year of returns and growth for our shareholders. Strong post Olympics trading and a benign operating environment along with the continued strict allocation of capital and aircraft across our leading network, improvements in revenue management and marketing, and a tight control of costs has meant that easyJet will deliver higher returns and its highest ever pre-tax profit for the financial year ending 30 September 2012, despite absorbing an additional £230 million in fuel costs this year.

We also continue to deliver for our customers with the best on-time performance in Europe this summer, low fares to convenient airports across Europe and our recently announced launch of allocated seating across the easyJet network.”

Ends:

Enquiries should be directed to:

easyJet plc  
   
Investors:  
Rachel Kentleton +44 (0) 7961 754 468
Tom Oliver +44 (0) 7950 996 262
   
Media:  
Paul Moore +44 (0) 7860 794 444
Edward Simpkins, RLM Finsbury +44 (0) 7947 740 551

1Compared to six months to 30 September 2011
2 Spot rates at 1 October 2012: Jet cif $1,061 per metric tonne, US $ to £ sterling 1.61, euro to £ sterling 1.25.
3 Fuel increase includes £7m of ETS costs; currency and fuel increases are shown net of hedging impact.

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