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EasyJet boosted by improved pricing trends as rivals suffer

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EasyJet boosted by improved pricing trends as rivals suffer

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LONDON (Reuters) – British budget airline easyJet <EZJ.L> said it was benefiting from the collapse of rivals and problems at Ryanair <RYA.I>, helping pricing trends to improve before a new CEO takes over. In outgoing CEO Carolyn McCall’s last set of results, easyJet reported record passenger numbers after a tumultuous few months for the sector, with Monarch, Air Berlin and Alitalia all going into administration this year. EasyJet said that the resulting reduction of capacity in the market, also due to a spate of cancellations at rival Ryanair, was helping to support prices. The carrier said it now expected revenue per seat growth at constant currency in the last three months of 2017 to be positive by low to mid-single digits. McCall said easyJet’s focus on costs helped to put the airline “at a strategic advantage during a period when there have been bankruptcies and some airlines have struggled operationally.” Its shares rose 3.7 percent in early deals on Tuesday. Analysts are looking to her successor Johan Lundgren, a former executive at TUI <TUIT.L>, to keep a tight rein on costs when he takes over on Dec. 1. The airline said total headline cost per seat was expected to decrease by around 2 percent in the 12 months to the end of next September, before a planned acquisition of parts of Air Berlin was taken into account. EasyJet said operations at Berlin’s Tegel airport would run a headline loss of around 60 million pounds in 2018, with one off costs of around 100 million pounds. Much of the costs will come from leasing crewed planes to build up operations over the winter and early summer, with the first flight from Tegel expected to take place in early January. Headline profit before tax for 2017 came in at 408 million pounds, in easyJet’s range of 405-410 million pounds.

(Reporting by Alistair Smout; Editing by Victoria Bryan and Kate Holton)
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