Key Morningstar Metrics for easyJet
- Fair Value Estimate: GBX 640
- Morningstar Rating: ★★★★
- Morningstar Economic Moat Rating: None
- Morningstar Uncertainty Rating: High
What We Thought of easyJet’s Earnings
easyJet’s EZJ profit before tax rose 9% and EBIT grew 18% year on year. Holidays delivered the strongest growth, with profits up 32%. Load factors improved despite a 9% capacity increase, and unit costs declined despite inflationary pressure.
Why it matters: Structurally stronger operations and lower cost per available seat kilometer, or CASK, underpin resilience, but unit revenue remains under pressure as the group digests winter capacity investments and longer average sectors that dilute revenue per available seat kilometer, or RASK, shifting profit contribution toward holidays.
- Capacity was shifted toward longer-haul leisure routes to boost productivity and spread fixed costs, while domestic flying was reduced after investment to support pricing on those markets.
- RASK declined due to longer sectors and promotional pricing, despite healthy underlying demand. CASK benefited from lower fuel costs, higher aircraft utilization, and operational efficiencies. One-off lease accounting gains and reduced disruption expenses further improved ex-fuel unit costs.
The bottom line: We maintain our fair value estimate for no-moat easyJet EZJ at GBX 640, supported by constrained European capacity, disciplined network expansion, and maturing holidays economics that provide earnings diversification beyond short-haul pricing cycles.
- Fleet up-gauging to the A321neo, higher utilization, and focus on primary airports lift productivity and lower unit cost, while route maturity from new Italian bases and selective closures support revenue quality and capital discipline.
- Our forecast for holidays growth to 2030, increasing attachment rates, and expansion into EU origin markets support profit visibility; with a strong balance sheet and its own fleet, easyJet is positioned to maintain its return on invested capital above the weighted average cost of capital, as in the midterm, delivery constraints persist.
