* Q3 revenue up 10.5 pct to 1.14 billion pounds
* Sees FY pretax at 450 mln stg-480 mln vs f'cast 433 mln
* Shares up 6.4 pct after earlier hitting all-time high
(Recasts, adds analyst comment, details, shares)
By Rhys Jones
LONDON, July 24 EasyJet's Plc's strategy
of adding flights on routes where rivals have cut back paid off
on Wednesday, as its forecast of earnings ahead of analyst
expectations helped propel its shares to a record high.
Rival airlines have been struggling with high fuel costs and
weak consumer confidence, sending some smaller carriers out of
business while the likes of British Airways owner IAG
and Air France-KLM have cut routes, leaving gaps that
low-cost airlines have been quick to exploit.
Luton, southern England-based easyJet said it expects pretax
profit of between 450 million pounds ($691.5 million) and 480
million in the year to Sept. 30, up from 317 million last year
and topping an average estimate of 433 million.
EasyJet, whose planes decorated with the company's
distinctive orange logo are a common sight at Luton and other
British airports, said its upbeat forecast assumed a 6 percent
rise in revenue per seat in the second half of the year.
Europe's second-largest low-cost carrier after Ryanair
Holdings Plc also said revenue rose 10.5 percent to 1.14
billion pounds in the three months through June.
EasyJet, which increased capacity by 3.6 percent in the
quarter, said it had particularly benefited from adding flights
on routes to Italy and Switzerland. Earlier this month it won
shareholder approval to buy 135 new Airbus planes
despite opposition from its estranged founder Stelios
"This stronger than expected performance was driven by
allocating capacity to higher-returning routes, competitor
retrenchment and allocated seating," said analyst Mark
Irvine-Fortescue at brokerage Jefferies.
Since Carolyn McCall took over as CEO in 2010, the airline
has introduced more flights between top business destinations,
as well as flexible tickets allowing passengers to change their
flight up to two hours before scheduled departure time, and
allocated seating in an attempt to steal corporate customers.
The airline's annual dividend and profits have doubled since
McCall took the helm.
"EasyJet is performing strongly, driven by a combination of
management initiatives and a benign capacity environment," said
McCall, adding 73 percent of seats had already been booked for
the six months to October.
EasyJet, which makes its profit in a second half that
includes the busy summer holidays, said revenue per seat rose
6.1 percent at constant currency rates in the quarter.
It also expects its fuel bill for the second half to be
around 9 million pounds less than the same period a year ago due
to hedging initiatives.
Shares in easyJet, which have risen more than 75 percent
this year, hit an all-time high of 1,449 pence in early trade
and were 6.4 percent up at 1,422 pence by 0750 GMT, valuing the
company at around 5.6 billion pounds.
EasyJet's founder, usually known as Stelios, set up the
airline in 1995 but quit the board in 2010 after a row over
strategy and remains at odds with its management. He had argued
that the money it plans to spend on new planes would have been
better lavishing on improved dividends or share buybacks.
($1 = 0.6508 British pounds)
(Editing by Neil Maidment and David Holmes)