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EasyJet ups profit forecast after record August

Passenger numbers for August were 7.06 million, a record for the group

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Britons booking late beach breaks boosted EasyJet

No-frills airline EasyJet (LON:EZJ) has upgraded its annual profit forecasts after hitting a monthly passenger record in August.

EasyJet said it expected full-year profit to come in at between £675mln and £700mln, rather than the £620mln to £660mln previously forecast.

Passenger numbers for August were 7.06 million, a record for the group and the second month in a row of more than seven million.

The load factor - how full its aircraft were - for August was 94.4%, a new monthly record.

EasyJet also had stronger than expected unit revenue for August and forecast a good September, due partly to particularly strong demand on beach routes favoured by UK passengers.

The strong revenue more than offset significant cost head-winds with greater-than-expected disruption across the network particularly in April, the impact of two fires at Rome Fiumicino airport, a one-off £8mln settlement with European air traffic control authority Eurocontrol and costs linked to higher load factors.

Chief executive Carolyn McCall said: "EasyJet was best placed to maximise the strong late summer demand from UK passengers to get away to beach and city destinations across Europe and will enable the airline to set new records for full year revenue and profit."

Shares rose 96p to 1768p. Liberum Capital said the positive update was unexpected and reiterated its 'buy' advice on the airline with a target price of 1930p.

However, Goodbody Stockbrokers voiced caution. It said there was a risk of heightened competition in the coming winter season and into next summer, given rival Ryanair’s (LON:RYA) significant capacity additions and push into European primary airports.

"As such, while the stock remains a 'hold' on our revised target price, our concerns on Ryanair encroachment, cost inflation and declining return on capital employed remain key negatives," the Irish broker said.

Quick facts: easyJet plc

Price: 575 GBX

LSE:EZJ
Market: LSE
Market Cap: £2.63 billion
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