Investec has retained its 'buy' rating and 670p target price for easyJet hailing the airline's new allocated seating plan.

The group announced on Wednesday that it will be introducing an allocated seating plan across its fleet after customers said they would rather avoid the scramble traditionally associated with boarding a low cost flight.

From November passengers will be allocated seats after a trial showed 70% of people on trial routes thought allocated seating was better than easyJet's current system due to the improved boarding experience.

"We regard this as strategically (higher customer satisfaction and closer product parity against flag carriers, with superior pricing) and financially positive (revenue accretive)," Investec said in a research report.

The broker says that assuming 5% current speedy boarding take-up, the new pricing bands "could drive a doubling of booked seating-related income, albeit from a low base, delivering a tangible improvement (over 2%) in passenger revenue per seat."

Meanwhile, Investec expects August's passenger statistics due on Thursday to show a "robust" performance with minor Olympics disruption to demand offset by stronger trading in the Olympics shoulder periods.

Shares were up 2.92% at 545.5p by 11:25.

BC

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