LONDON (Reuters) - Shares in easyJet (EZJ.L) soared on Tuesday after a quarterly revenue rise showed the British budget airline had benefited as rivals struggled, in the first trading update under new boss Johan Lundgren.
The industry was reshaped last year after British holiday carrier Monarch collapsed, Germany’s Air Berlin and Italy’s Alitalia went into administration and Europe’s biggest budget airline Ryanair (RYA.I) scrapped flights due to pilot rostering issues.
That reduction in capacity has helped easyJet, supporting prices and load factors on its flights. It also swept up part of Air Berlin’s operations at Berlin Tegel airport. The first Tegel flight by easyJet was this month.
“Clearly there’s been less competitive pressure on certain routes,” Chief Executive Lundgren, who joined in December, told reporters, citing Monarch, Ryanair, Air Berlin and Alitalia as factors.
“We’re always seeing the impact of what’s happening in the competitive landscape, and it has been to our advantage this time,” he said.
Shares in easyJet, Europe’s No.2 no-frills carrier, rose 6.3 percent after first quarter results, hitting a two-year high.
The airline said total revenue increased 14.4 percent to 1.14 billion pounds in the quarter ending Dec. 31, helped by lower growth from rivals in its markets and positive foreign exchange effects.
Lundgren said it was too early to comment on pricing for the summer, but analysts said the positive trading environment for easyJet was likely to continue.
RBC analysts upgraded easyJet to “outperform” from “sector perform” after the numbers.
Analysts at broker Goodbody said the “stunning” first quarter yields and strong demand could see analysts raise expectations for full-year 2018 results by more than 10 percent.
“This is a very positive first look at yields coming into 2018, which is positive for the sector as a whole,” the Goodbody analysts wrote in a note.
Lundgren succeeded Carolyn McCall, who left easyJet after more than seven years at the helm to become CEO at broadcaster ITV (ITV.L).
In a separate announcement, easyJet said Chief Commercial Officer Peter Duffy would leave, with many of his responsibilities assigned to the new role of chief data officer.
“That role that was there, as consequence of my restructure, will not be there,” Lundgren said, adding he expected no other board changes.
Reporting by Alistair Smout; Editing by James Davey and Edmund Blair