Holidays are still a top priority despite cost of living pressure, says Easyjet boss Johan Lundgren
Consumers in a hurry are pushing trips abroad despite the rising cost of living, explains the boss of Easyjet.
“Travel has taken the top spot when it comes to discretionary spending. People want to travel,” Johan Lundgren said.
His comments came after the low-cost carrier saw an increase in passenger numbers in the final three months of 2022. Easyjet carried 17.5 million people in the quarter, a 47% jump from the previous year.
Easyjet boss Johan Lundgren said he was “surprised” at the strong demand against a bleak backdrop as families face soaring food, fuel and energy bills.
And the airline said it would be back in the black this year after three years of losses. In the 12 months to September, Lundgren said he would smash analysts’ forecasts of a profit of £126m. The shares jumped 9.7%, or 45.4p, to 513.4p.
The stock has jumped almost 60% since the start of the year amid growing evidence that holidays remain a priority for cash-strapped households.
A KPMG report found that while nearly two-thirds of Britons will cut back on spending this year, holiday plans are the least likely to be dashed.
AJ Bell Chief Investment Officer Russ Mold said: “Many consumers still have the appetite and the means to spend money on experiences despite the prospect of a recession.”
People work hard and want to have fun, which means that a vacation abroad remains at the top of the list of things people are willing to pay for.
Lundgren said he was “surprised” at the high demand against a bleak backdrop as families face soaring food, fuel and energy bills.
Easyjet’s performance continued this year, helped by three record weekends this month.
Customers took advantage of January sales and the airline filled five planes per minute during peak hours.
Easter bookings are a quarter ahead of pre-Covid levels and there is strong demand for summer getaways despite prices for Easter being almost a quarter higher than at the same time before Covid does not strike.
“People have had restrictions and been home a lot and they want to get out and experience things,” Lundgren said.
The rising cost of living was driving a shift to more affordable breaks. Trips to Turkey and Egypt are doing “exceptionally well”.
He said flight availability would return to pre-Covid levels by the summer. “In July, August and September, we expect to be back to 2019 levels,” Lundgren said.