LOW-COST airline easyJet has said it expects its holidays division to deliver full-year profits of more than £80 million as it ramps up capacity ahead of the peak European summer holiday season.

The forecast came as the UK-based carrier revealed an 80% surge in revenues to £2.7 billion in the first half with pre-tax losses for the six months to March 31 down 25% to £415m compared with the same period a year earlier.

Pointing to its “operational resilience”, easyJet said that a surge in winter passenger numbers and higher ticket prices – the average price paid was £61, up 24% on a year earlier – contributed to its growth during the period.

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Johan Lundgren, easyJet’s chief executive noted that the airline’s “optimised network combined with the strong demand seen for flights and holidays, enhanced revenue capabilities and operational resilience, means we enter the summer with confidence”.

He also pointed to recent research showing that “travel is the number one priority for household discretionary spend with customers safeguarding their holidays and increasingly opting for low-cost airlines and brands which provide great value”.

easyJet, which operates bases at both Edinburgh and Glasgow airports and announced plans to establish its ninth UK base at Birmingham Airport, said it expected to return to operating at pre-pandemic capacity this summer.

The airline said it would offer about 56 million seats on flights in the six months to September 30, up 9% from the same time last year. This includes new flights to Porto and Lisbon from Glasgow Airport and, from Edinburgh Airport, Santorini, Antalya and Lisbon.

Mr Lundgren noted: “easyJet Holidays expects to deliver full-year profits of more than £80 million as it continues its rapid growth in the UK alongside its entry into the European package holiday market.

“From summer, it will start selling holidays in Switzerland which will be the first of a number of planned new European markets.

“All of this progress should result in the acceleration in the delivery of our medium-term targets while we continue to also capture the opportunities ahead.

"This includes the addition of a new base in the UK, in Birmingham, which will not only provide more choice and connectivity for consumers but also the creation of hundreds of jobs.”

The airline said that it is “starting to benefit from actions taken over the past 18 months”, adding: “easyJet will continue to allocate aircraft to the most profitable routes based on demand, following the 50 aircraft which have been reallocated over the past two years.

"These actions, coupled with the step-changed revenue generation from ancillary products, growth at easyJet holidays, and a continued focus on cost is enabling the expected acceleration of the delivery of our medium-term targets.”

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Analysts also pointed to easyJet’s focus on using “favourable airports” in making it more resilient. “This is more expensive but more attractive than flying into less convenient hubs,” said Sophie Lund-Yates, lead equity analyst at Hargreaves Lansdown. “The rapid expansion of easyJet Holidays is also important.

“Not only is this a future growth driver, it speaks volumes about the kind of getaways people are after. The no-nonsense, cross-selling opportunities are being lapped up by customers who don’t want to trawl separate travel and accommodation sites.”

AT CMC Markets UK, chief market analyst Michael Hewson pointed to an improvement driven by a number of factors, including the relaxation of pandemic-related travel restrictions, strong growth in the easyJet holidays business, and a step change in the airline’s ancillary offering, not to mention higher ticket prices.

“Ancillary revenue, which includes things like checked bags and seat assignments, saw a big increase, rising to just shy of £2bn, and is forecast to increase to £2.47bn in the current fiscal year,” he noted.

Meanwhile, John Moore, senior investment manager at RBC Brewin Dolphin, added: “easyJet has positive momentum behind it and is benefiting from the self-help measures taken during the pandemic.

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“The airline is more efficient on routes, delivering better margins on ancillary services, and looks leaner more generally, which is beginning to filter through to the bottom line.”