EasyJet shares hit by jitters over unsold seats

EasyJet, the no frills airline, reported yesterday that ticket sales rose nearly 40 per cent in December, but the number of empty seats on its planes has increased, sparking fears the group's expansion plans may not be paying off.

The airline sold fares to 1.43 million passengers last month, a 39 per cent rise on the same time last year, bringing its total to 17.3 million in the year to the end of December.

But news that the airline's load factor had fallen sent shares down as much as 10 per cent before closing 4.2 per cent lower at 273p. The load factor shows the number of passengers as a percentage of the potential number of seats available. EasyJet, including figures for Go, which it bought from British Airways last year, saw its load factor fall to 77 per cent in December from 79.9 per cent in the same period in 2001.

EasyJet had managed to improve its passenger numbers in 2001 in the face of fears of flying after 11 September by luring travellers with deeply discounted fares. Roy Webster, the chief executive of the group, said load factors had returned to levels seen in December 2000.

Analysts have expressed concern that easyJet is exposed to a number of risks. The business has been executing an ambitious expansion plan, revealing plans last year to add 120 Airbus aircraft to its fleet, and taking out the option for another 120. Capacity at the airline grew 44 per cent, but this puts pressure on the group's average fare margins. Analysts also want to see easyJet improve the load factor at Go, which is currently acting as a drag on the whole group.

Mr Webster said the group's target was to get passenger numbers above 80 per cent every month. Rival budget airline, Ryanair, last week said its passenger numbers were up 64 per cent in December and its load factor was 85 per cent. He said the integration of Go was progressing ahead of schedule.

Mr Webster said December had been busy, with the announcement of a number of new winter routes and the launch of its schedule of 100 routes for the summer.