At a time when millions of people are finding it a stretch to go on holidays overseas due to the cost, budget airlines have proved to be the saviour of many on modest incomes who want and/or need to get away from it all for a week or two. Some budget airlines have succeeded at the expense of more upmarket rivals, with EasyJet among the most stellar performers in the entire airline industry.
Recently, the airline, founded by Greek entrepreneur Stelios Haji-Ioannou recorded annual passenger numbers of 60 million for the past 12 months, the first time it had done so in its history. This figure can be partly explained by increasing demand for budget holidays to European destinations, which by and large are much cheaper than long-haul flights away from the continent.
Flying high
The new passenger figures come at a good time for EasyJet. Their recent good news has given shareholders reason to feel positive about the firm’s prospects for the immediate future, as a spokesperson from Cityindex.co.uk explained:
“Another important milestone has been passed today when Easy Jets announced its passenger numbers grew by 5.6% annually to break above the 60m mark for the first time, continuing its consistent growth rates of the past decade in adding 10m passengers to its carriers every two to three years.
“In May there was a 3.4% increase in passengers compared to last year whilst load factor grew by 0.1% to 88.1%. Whilst the news marks a milestone for the airline and shows continued demand for budget airlines as the carrier of choice to Europe at a time when consumers are suffering from low wage growth, shares fell to the bottom of the FTSE 100 performers table losing 3.4%”, he said.
“The falls however are not in reaction to the news but more so about investors taking profits off the table after a strong run in share prices, which have outperformed the FTSE in the last 2 weeks.
“Shares had rallied over 15% after the airline announced a smaller loss for the first half of the year on 15 May. Shares recently hit a new record high above the £13 mark, and so today’s 3% falls is nothing to get overly concerned about”, he concluded.
Taking on board
If EasyJet continue to thrive, then it might force other more established airlines to consider making a few changes. The likes of British Airways have struggled to keep pace with them and other low-cost airlines such as Ryanair, and not just because of ticket prices.
Shareholders have plenty of cause for optimism about EasyJet’s future. As long as many people continue to look for bargain holidays, the airline will continue to seem attractive to frugal holidaymakers.
