In early Thursday trading, the stock price of EasyJet (LON:EZJ), listed in London, dropped after the low-cost airline announced that CEO Johan Lundgren will step down in 2025.
Lundgren has been with the company for seven years since joining from travel group Tui. During his tenure, he navigated the severe financial pressures brought on by travel restrictions related to the COVID-19 pandemic and led the efforts to recover from the crisis.
In October this year, Lundgren announced that the company had ordered over 150 aircraft to capitalize on the surge in current travel demand. Current CFO Kenton Jarvis will take over as EasyJet CEO in early January next year. He expressed his support for the board's performance improvement plans.
Jarvis will face the challenge of convincing skeptical investors as EasyJet's stock price remains well below pre-pandemic levels. However, analysts at RBC Capital Markets believe that Jarvis's promotion will pose "limited management transition risks."
According to a Reuters-cited LSEG survey, the group reported a pre-tax loss of £350 million in the first half of this fiscal year, slightly higher than analysts' expectations of £340 million but narrower than the £392 million loss in the same period last year.
Rising fuel prices and investments in holiday businesses have driven up EasyJet's main costs, although an 11% increase in passenger traffic boosted revenue.
RBC analysts noted that EasyJet's guidance no longer described fourth-quarter revenue per seat (RPS) as "significantly exceeding expectations," instead indicating that the airline's load factor and yields will improve.
Analysts stated in a client report, "We believe the airline's Q4 RPS commentary has weakened compared to previous comments, although holiday guidance has been strengthened."
In a statement, Lundgren said that EasyJet is "focused on another record summer, which is expected to bring strong profit growth in fiscal 2024" and is on track to meet its medium-term targets.
