Easyjet set for £447m profit bump – but oil prices may ignite concern

Easyjet is set to swing to a £447m profit next week, as the budget carrier cashes in on a stellar summer season of travel.

Analysts have forecast this figure in full-year pre-tax profits, against last year’s £208m loss, with a further £608m pencilled in for fiscal 2024.

Shares in the low-cost carrier are up over 20 per cent in the year to date. In the three months to September, the company generated a record £640m to £660m, bolstered by strong passenger growth and higher ticket fares.

October capped off the summer with a bullish trading update, in which Easyjet reinstated its dividend and announced a fresh aircraft order.

And chief executive Johann Lundgren is currently eyeing up a target to more than double annual profit to £1bn by 2029.

The performance has been exceptionally strong so far. But that £1bn goal has yet to fully chime with investors, as shares sit at two-thirds below the highs seen prior to the pandemic.

AJ Bell analysts Russ Mould and Danni Hewson said: “Such scepticism may reflect concerns over oil prices, the near-term trajectory of global consumer spending and the economy and also worries that airlines are becoming too bullish when it comes to adding capacity, given the very hefty orders placed in 2023 so far across the industry.”

Global oil prices, which have a significant impact on jet fuels such as kerosene, spiked in response to Hamas’s attack on Israel in early October, and there is concern that renewed violence in the Middle East could have a long term impact.

News of Easyjet’s 147 Airbus aircraft order and £1bn profit target ultimately fell flat on the day, with shares falling over five per cent despite the near-perfect update.

The airline giant has also been pummelled by airspace disruption throughout the year. French air traffic control strikes saw it axe 1,700 summer flights, while meltdown at the UK’s National Air Traffic Service (Nats) in late August prompted cutting criticism from Lundgren.

Gatwick, the budget carrier’s primary hub, was forced to cap flights in late September for weeks after nearly a third of staff in its Nats-operated tower were unavailable due to sickness.