EasyJet expects to fly more passengers in 2025, shares hit 8-month highs
Shares up as much as 4.2% after FY2024 results
Growth on longer leisure routes expected for next year
Incoming CEO Kenton Jarvis takes over from Johan Lundgren in new year
Adds shares in paragraph 1,4
By Joanna Plucinska and Yadarisa Shabong
LONDON, Nov 27 (Reuters) -EasyJet EZJ.L is looking to fly more passengers in its 2025 financial year, helping the budget airline's shares to hit their highest level in nearly eight months.
The company on Wednesday forecast a 3% increase in capacity in its next financial year after reporting a strong increase in annual operating profit partly due to a recovery from disruptions arising from the Middle East conflict.
"The airline will continue to grow, particularly on popular longer leisure routes like North Africa and the Canaries and we plan to take 25% more customers away on package holidays," CEO-designate Kenton Jarvis, who is replacing Johan Lundgren next year, said in a statement.
EasyJet shares rose as much as 4.2% to their highest level since early April.
Rival Ryanair RYA.I earlier this month reported a big drop in after-tax profit in the first half of its financial year and also faced a fall in ticket fares in the summer, although those prices have since normalised.
EasyJet has dodged many of the issues that have plagued the airline industry thanks to its Airbus AIR.PA fleet equipped with CFM engines. It has also avoided the challenges surrounding U.S. plane manufacturer Boeing BA.N and engine maker Pratt and Whitney, owned by RTX RTX.N.
Other European airlines, such as Lufthansa LHAG.DE and Air France-KLM AIRF.PA, have faced some issues with limited plane deliveries, engine challenges, spiralling labour costs, flattening ticket prices and moderating demand.
EasyJet reported an operating profit of 597 million pounds ($750.5 million) for the year ended Sept. 30, up a quarter from a year earlier but lower than the 625.6 million pounds expected by analysts, according to an LSEG-compiled poll.
Outgoing CEO Johan Lundgren said that results were a "significant step towards our goal of sustainably generating over one billion pounds ($1.26 billion) annual profit before tax".
The airline has faced slightly higher fuel costs and some disruption from the Middle East, but analysts and investors say lower oil prices and a new network focus could help easyJet next year.
They are optimistic about the company's ability to meet its expectations for the coming year, with strong demand set to continue and more interest in easyJet's lucrative package holiday business.
For the current fiscal year ending September 2025, easyJet expects capacity of about 103 million seats and holiday customers to grow by about 25% from last year.
Alex Irving, an analyst at Bernstein, said this strategy could also "possibly be targeting a greater share of 'sun and sand' destinations in the Eastern Mediterranean, following the success of the holidays business that continues to go from strength to strength."
Analysts said lower oil prices will also help to ease easyJet's cost pressures next year.
($1 = 0.7947 pounds)
Reporting by Joanna Plucinska in London and Yadarisa Shabong in Bengaluru; Editing by Sonia Cheema, Louise Heavens, Alexandra Hudson and Jane Merriman
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