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EasyJet Expects Sustained Recovery Despite Ongoing Conflict in Middle East

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Sakchi Khandelwal
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EasyJet Expects Sustained Recovery Despite Ongoing Conflict in Middle East

British low-cost airline, EasyJet, has voiced its confidence in a sustained recovery from the Covid-19 pandemic, despite the immediate concerns posed by the conflict between Israel and Hamas disrupting the air travel industry. The recent surge of violence in the region has led to safety concerns, prompting several airlines, including EasyJet, to cancel or reroute their flights. However, the airline remains optimistic about the long-term prospects of the industry's recovery, as global vaccination programs continue and travel restrictions gradually ease.

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Optimistic Outlook Amidst Geopolitical Unrest

While the conflict in the Middle East has created immediate challenges, EasyJet is bullish about the future. The airline’s latest financial report revealed a strong forecast for the summer 2024 high season, an indication that it is preparing for an increase in demand for air travel. Amidst competitors struggling to field aircraft, EasyJet anticipates an 8% rise in capacity in the second half of the year ending in September 2024. In addition, the airline reinstated its dividend, a move signaling its confidence in a post-pandemic recovery.

Financial Performance and Customer Sentiments

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EasyJet reported a pre-tax profit growth of 221% for its holidays segment, amounting to £122 million in the year to September 30. An impressive growth in revenue from EasyJet holidays, which more than doubled from the previous year, contributed significantly to the company's overall financial performance. Furthermore, research commissioned by the airline revealed that 67% of UK consumers are more likely to travel abroad in 2024 compared to this year.

Looking Ahead: Challenges and Opportunities

EasyJet recognizes that the conflict in the Middle East has impacted travel demand, and does not anticipate an improvement on first-quarter losses covering the three months ending December 2023. However, the company maintains a positive outlook for its full financial year. The recent tension and subsequent flight cancellations to Israel and Jordan may result in a temporary dip in the first quarter's performance, but the airline is hopeful for the rest of the year. The return to profit for the first time since the pandemic and the reinstatement of its dividend after four years, paired with strong forward bookings for the 2024 summer, provide a positive outlook for EasyJet's future.

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