easyJet plc today publish their interim management statement for the quarter ended 31 December 2010.

Highlights:

• Total revenue up by 7.5% to £654 million
• Seats flown grew by 7.7% to 13.8 million and total revenue per seat was flat at £47.48. At constant currency revenue per seat grew by 0.3% as growth in underlying yields more than offset some weakness on ancillary revenues
• Passengers carried increased by 8.8 % to 11.9 million, with 59% of passengers originating outside the UK. The load factor increased by 0.9 percentage points to 86.7%
• Cost per seat ex fuel reduced by 2.9% excluding additional costs resulting from disruption caused by ATC strike action and severe weather  
• In the quarter disruption from ATC strike action and severe weather cost £6 million and £18 million respectively and in addition led to lost contribution of £7 million. easyJet is working to recover a significant proportion of this through additional costs savings and revenue opportunities
• easyJet placed an aircraft order with Airbus in the period; with 15 existing A320 aircraft options converted to firm orders, 20 A319 contracted aircraft deliveries converted to A320 deliveries and secured options over a further 33 A320 aircraft bringing the total number of options held by easyJet to 42 aircraft
• easyJet's position continued to strengthen with market share gains across Europe particularly London Gatwick, Paris Orly and CDG and Geneva
• Strong balance sheet with cash and money market deposits of £1,281 million (excluding restricted cash) and un-drawn committed financing facilities at favourable rates of $641 million as at 31 December 2010

To read the report in full... click HERE

Commenting on today’s easyJet trading update and share price drop, Sir Stelios Haji-Ioannou, founder and largest shareholder of easyJet, said:

I would like to draw the attention of the investors in easyJet PLC to the statement I made last November  and I quote from the statement dated 16th November, 2010:

"The management of easyJet also needs to carefully assess the financial viability of any fleet expansion. If the profit target per aircraft is roughly £2m, then the company should only buy more aircraft (over and above the 200) if it has identified specific new routes for these new aircraft that produce that amount of profit per aircraft. New route data should be shared with all shareholders for transparency."

"I remain very concerned with the strategy of the previous management which expanded the fleet to develop summer holiday routes leaving it with approximately 40 aircraft parked over the winter. Parked aircraft lose money.”

Unquote.

Commenting today (20th January, 2011) Stelios said:

“It is now clear to me with losses of £160m in the six months of the winter, it will be impossible for the company to make an annual profit of more than £480m which represents the 12% return on capital employed in a 200+ aircraft fleet.”

“The business is too seasonal for its own good and it should not blame the weather every year.”

“I wonder where the latest 15 additional Airbuses ordered earlier this month will be deployed next winter without losing even more money? There are not many un-seasonal routes left in Europe.”

Further coverage:

The Guardian: easyJet's shares hit hard on warning loss could double 

Financial Times: Bad weather and strikes cost easyJet £24m

Daily Mail: Ex-easyJet boss' £2.5m in 6 months

The Times: Bet of the day - In the know: support for easyJet