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EasyJet Business Travel Takes Off With Success of Seat Booking

May 16, 2014

easyjetJennifer Rankin, Gwyn Topham, The Guardian, May 16, 2014

EasyJet has flown a record 12 million business passengers, underscoring how the airline continues to take away trade from longer-established rivals.

The company reported on Tuesday that business passenger numbers had grown by 8.5% since last year, ahead of 4% growth in overall passenger numbers. EasyJet has said its decision to introduce allocated seating on flights has attracted older passengers and business travellers who once shunned the airline.

Carolyn McCall, easyJet's chief executive, told BBC Radio 4's Today programme that allocated seating was the single most popular thing the airline had done for its customers. Almost 28 million passengers flew with the airline during the six months to the end of March, but business customers are a more lucrative group because they book later and will pay extra for more legroom.

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The airline's growing popularity with business travellers boosted revenue per seat by 2.6% to £54.80 – with total revenues up more than 6% to £1.7bn. These new customers also helped the airline to deliver a better-than-expected set of financial results: easyJet reported a pre-tax loss of £53m for the six-month period, compared with £61m the previous year.

The airline usually posts a loss from the winter period when fewer passengers fly, but still managed to beat its own guidance, despite the late Easter in 2014.

EasyJet's strong performance contrasts with the fate of national legacy carriers and regional airlines that have been cutting back routes. While the airline has added routes to Moscow, north Africa and Israel, increasing capacity by 1.1m seats, its competitors have reduced capacity by 0.9m seats.

Richard Hunter, head of equities at Hargreaves Lansdown stockbrokers, said: "The company will continue to load the pressure on rivals, given both its business traveller and general European offerings."

The outlook also looked favourable for package holiday firm Tui Travel, which reported it had narrowed its losses to £386m during the winter season, compared to £410m last year. Tui said sales of its unique holidays were up three percentage points and now account for 70% of all bookings. Unique holidays, in which hotels are offered only through one agent, tend to be more expensive, and helped Tui offset a decline in volume of sales.

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This article was written by Jennifer Rankin and Gwyn Topham from The Guardian and was legally licensed through the NewsCred publisher network.


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