EASYJET is expected to announce sharply reduced first-half losses which could lead to profit forecasts being upgraded this week and a rise in the airline's share price.
The group's half-year results tend to be seasonal in nature with traffic higher in the second half, which means easyJet usually records losses in the six months to the end of March.
This year is expected to be no different, but analysts expect in
terim pre-tax losses to fall from £40m in 2006 to around £18m this time round because of revenue growth from new routes.
Tony Shepard, analyst at Charles Stanley, said: "EasyJet's interim figures are traditionally loss-making, but this year should see a marked improvement in the results. Recent passenger numbers have been encouraging... and we would not be surprised if the interim results are greeted with profit upgrades for the full year. This could lead to further progress in the share price in the short term. EasyJet has a market value of around £3bn and so it is a possible candidate for promotion into the FTSE 100."
Shares have been on a bull run since July and were trading hands for more than 730p last month, although they have since tailed off. Andrew Fitchie, analyst at Collins Stewart, said: "Upgrades are necessary to sustain the shares at current levels."
EasyJet's Irish rival Ryanair last week revealed its load factor - how full its planes were - declined by two percentage points on the back of the doubling of air passenger duty and other charges.
Analysts say there is an outside chance that EasyJet could fail to impress in this area. Fitchie said: "There has been no hint before now of widespread demand softness, but following Ryanair's comments there is scope for disappointment."
Tim Marshall, analyst at UBS, said EasyJet could report full-year pre-tax profit growth of more than 65% as a result of adding new routes. UBS recently raised its price target from 800p to 900p.
He said: "The current company guidance is for profit before tax to increase by 40% to 50% compared to last year but we think this now looks too cautious despite the higher capacity growth in the second half of the year."
Last month, EasyJet tried to boost its green credentials by calling for hundreds of the most environmentally unfriendly planes (those built before 1990) to be banned from the skies.
The full article contains 406 words and appears in Scotland On Sunday newspaper.
