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EasyJet revenue gets business passenger boost
LONDON (Reuters) - British budget airline easyJet said quarterly revenue rose 9.2 percent, after it attracted more business travellers by adding flights on routes where rivals have cut capacity.
EasyJet also benefited from extra services, such as flexible tickets and allocated seating, it has started offering in a bid to steal business customers from legacy carriers such as IAG's (ICAG.L) British Airways.
Demand for flights between London, Geneva, Milan, Paris and Rome were especially strong during the three months to December - easyJet's first quarter, a spokesman said on Thursday.
Competitors have been struggling with high fuel costs, weak consumer confidence and the euro zone crisis. Some ceased operations last year. Others have cut routes, leaving gaps that low-cost airlines have been quick to exploit.
"With around 80 percent of (fiscal) first-half seats now booked, easyJet expects to contain first-half loss before tax to between 50 million and 75 million pounds ... this assumes a normal level of disruption in the second quarter," chief executive Carolyn McCall said on Thursday.
Prior to its trading statement, easyJet was expected to report a first-half pretax loss of 109 million pounds, according to Thomson Reuters data. The airline makes its profit in its second half, which includes the busy summer holiday period.
Its shares were up 3.7 percent to 887.0 pence by 1020 GMT, down from an earlier record high at 897.5 pence and valuing the group at around 3.5 billion pounds.
Europe's second-largest budget airline behind Ryanair (RYA.I) said first-quarter revenue rose to 833 million pounds, with passenger numbers up 6.2 percent to 13.7 million. Costs per seat, excluding fuel, rose 0.5 percent.
The airline, which will start services between London, Manchester and Moscow later this year, said it was now carrying 10 million business passengers annually.
Panmure analysts said the revenue guidance was "very positive" and retained a 'buy' recommendation for the stock.
Several carriers including Scandinavian group SAS (SAS.ST), German airline Lufthansa (LHAG.DE), Air France-KLM (AIRF.PA), and IAG's Spanish carrier Iberia have already cut thousands of jobs. This week, London-listed Flybe (FLYB.L) said it would axe 10 percent of its British workforce.
EasyJet's load factor - a measure of how many seats are sold - rose 1 percentage point to 88.6 percent in the quarter.
The carrier, which has hedged 78 percent of its fuel requirement for 2012/13, expects fuel costs to be 5-25 million pounds higher in the current year.
Disruption related to the recent snowfall across Europe led to 200 cancellations, mainly in France and Switzerland, at a cost of around 1.5 million pounds, it said.
Last year, the company posted a first-half loss of 112 million pounds. (Editing by Dan Lalor and Rosalba O'Brien)
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