Lower Pre-Tax Losses
Shares in Easyjet are trading around 10% higher from yesterday’s close after gapping higher at the open on a more upbeat update from the company. Easyjet forecasts its first annual profit in 2023 since the pandemic began on the back of record bookings. The spike in bookings has helped the company reduce its pre-tax losses to £133 million in the December quarter from £213 million over the same period a year earlier.
Higher Passenger Numbers
The company also noted a 47% jump in passenger volume from a year earlier. Interestingly, the airline also noted the return of “New Year” holiday bookings which had died down massively over the prior year. In all, the company now forecasts first half losses to be significantly lower than expected with a return to annual profit seen over H2.
Airlines have been hard hit over the last year with the post-pandemic recovery blighted by the Russian invasion of Ukraine, the cost-of-living crisis and soaring fuel costs. However, with inflation finally starting to cool across Europe and with fuel costs having fallen massively, the outlook is starting to improve. The relaxing of China’s borders for the first time since the pandemic began is also expected to feed into a pickup in global travel this year which should help further underpin Easyjet shares.
The rally in Easyjet shares has seen price breaking out above the 482.5 level and above the bearish trend line from 2021 highs. With momentum studies firmly bullish, the focus is on a continuation higher while price holds above this level, putting 570.4 in view as the next upside target for bulls. To the downside, should price reverse back below the trend line, 427.1 is the main support to note.