EasyJet Sees Continued Demand as Q1 Results Meet Expectations, Stock Climbs

easyJet (LON: EZJ) shares rose around 1.8% at the start of Thursday's session after the company released its Q1 FY26 trading update, reporting results in line with expectations.

The airline saw strategic route investments perform as planned, with booked load factors for the remainder of FY26 ahead year-on-year. Despite a headline loss before tax of £(93) million, compared to £(61) million in Q1’25, the company maintains an unchanged FY26 outlook.

Capacity increased by 9% year-over-year (YoY) based on Available Seat Kilometres (ASK), while seat capacity grew by 5%. Passenger growth rose by 7% YoY, and the load factor improved by 2 percentage points to 90%. Revenue per ASK (RASK) remained flat YoY, while total headline cost per ASK (CASK) increased by 2% YoY.

easyJet holidays shone with a £50 million headline profit before tax (PBT), fueled by customer growth of 20%. Operational performance also improved, with on-time performance reaching 77% (+4ppts YoY) and airline customer satisfaction (CSAT) at 83% (+4ppts YoY). Holidays CSAT stood at 84% (+1ppt YoY).

For FY26, easyJet anticipates ASK capacity growth of approximately 7% YoY and seat growth of around 3% YoY. easyJet holidays aims to grow its customer base by up to 15%, from a base of 3.1 million customers. Airline Q2 bookings are 63% sold (+2ppts YoY), with RASK expected to be up in the low single digits YoY. H2 bookings are 22% sold (+1ppt YoY). easyJet holidays H1 is 97% sold, with average selling prices up in the high single digits. H2 is 47% sold.

The airline anticipates modest inflation in FY26 total headline CASK. Cost and operational efficiencies, along with favorable fuel prices, are expected to partially offset market-wide cost inflation.

Key Drivers:

• Strategic Investments: Investments in Milan Linate and Rome Fiumicino are expected to yield revenue maturity benefits over time.
• easyJet Holidays Growth: The holidays segment continues to be a significant driver of profitability.
• Operational Improvements: Enhanced on-time performance and customer satisfaction are contributing to positive momentum.

Kenton Jarvis, easyJet’s CEO, stated, “We have seen continued demand for our flights and holidays over the last quarter, growing airline passenger numbers and load factor with easyJet holidays maintaining its strong growth trajectory attracting 20% more customers year on year. “

“Bookings are building well for the summer season, with our largest ever January booking period. We remain committed to delivering sustainable value and continue to progress towards our medium-term target of generating over £1 billion in profit before tax.”

Balance Sheet & Liquidity:

The company's cash and other cash investments remain strong at £2.8 billion. Net debt stands at £(106) million, significantly improved from £(484) million in the previous year.