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EasyJet outlines trading and Tegel impact on full year

UK budget carrier EasyJet is putting its consensus full-year pre-tax profit at £475 million ($662 million) following its acquisition of Air Berlin assets and the launch of a Berlin Tegel operation.

Its previous headline consensus, prior to the acquisition, had been around £505 million.

EasyJet, which has unveiled a first-quarter trading update, expects a £35 million benefit over the first half following a "positive" trading environment.

This includes capacity reductions in its markets, notably following the collapse of Monarch Airlines and Air Berlin and the impact of flight cancellations from Ryanair.

But EasyJet estimates an initial negative £60 million profit impact from the newly-acquired Tegel operation, which it picked up from Air Berlin. The Tegel flight programme commenced on 5 January.

EasyJet is aiming to release the Tegel summer schedule shortly. It says the transition process is "progressing well", with leases on Air Berlin aircraft secured and the registration transfer under way.

"The first ex-Air Berlin crew has now completed training and there is a strong recruitment pipeline over the next few months," the carrier says.

EasyJet is intending to raise capacity by 5% over the first half, excluding Tegel, and by 5-6% over the full year.

The carrier generated a 14% rise in revenues over the first quarter, increasing to £1.14 billion, the first results to be disclosed under newly-appointed chief executive Johan Lundgren.

EasyJet says it benefited from a 6.6% rise in revenue-per-seat at constant currency, as passenger numbers increased 8% to 18.8 million.

The airline hiked capacity by 5.5% and load factor improved by 2.1 points to 92.1%.

Headline cost-per-seat, excluding fuel, increased by 1%. EasyJet says underlying unit cost improvements – an efficiency programme delivered £28 million in savings for the quarter – have been offset by inflation as well as the effects of weather and air traffic control strike disruption.

Lundgren says the airline has had a "strong start" to the financial year. "We have great revenue growth, strong cost control, a robust operation and a strong balance sheet," he says.

Revenue per seat for the second quarter is expected to increase by mid- to high-single digits, partly resulting from timing of the Easter holiday period.

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