EasyJet Plc, Britain’s largest low-cost airline, said its loss over the winter low season is set to shrink as the collapse of tour operator Thomas Cook Group Plc pushes more customers its way.
The stock rose the most on the FTSE-100 Index on Tuesday after EasyJet said the shortfall for the six months through March is likely to be smaller than last year’s 275 million-pound ($358 million) loss. Robust demand and lower capacity levels at competitors have bolstered fares, the airline said.
The collapse of UK travel giant Thomas Cook last September accounted for almost a fifth of the 8.8% gain in revenue per seat in the December quarter, Chief Executive Officer Johan Lundgren said on a conference call. The former TUI AG manager founded a new EasyJet Holidays division in November.
EasyJet follows Irish rival Ryanair Holdings Plc in issuing positive guidance after a difficult year forced a clutch of operators into bankruptcy, with Thomas Cook the highest-profile casualty.
The grounding of Boeing’s 737 Max will limit Ryanair’s expansion this coming summer, meaning the UK airline is well-placed to pick up extra demand, according to Sanford C Bernstein.
“Capacity growth looks moderate for this environment,” said analyst Alex Irving. “With Thomas Cook, the Max and the rest, why not go faster?” Lundgren is currently targeting a 3% seating increase over the year.
Shares of Luton, England-based EasyJet advanced as much as 5.7% and were trading 5% higher in London, the best performance on Britain’s benchmark index after stocks slumped worldwide amid
concerns about the economic impact of an outbreak of coronavirus in China.