EasyJet reports record £581m profit

EasyJet profits have soared by 22% as the company continued to bolster its position as Europe’s second-largest budget airline.

It reported record profits of £581m for the year ending 30 September, as revenues climbed by 6% to £4.5bn.

The bumper profits mean that shareholders, including founder Sir Stelios Haji-Ioannou, will share a £180m windfall, as the airline has upped its ordinary dividend by more than a third to 45.4p per share. However, easyJet will not pay a special dividend this year, unlike in 2013 when it bowed to a longstanding demand from Haji-Ioannou for the exceptional payout.

Profits growth at the biggest short-haul carrier in the UK has slowed on last year and the airline’s share price dropped 1% to £15.30 in early trading. The budget airline faces more competition from a rejuvenated Ryanair, Europe’s biggest no-frills carrier, which is experimenting with a new policy of being nice to its customers. Ryanair is also emulating easyJet’s success with optional extras, such as allocated seating and premium seats with extra legroom.

Carolyn McCall, the easyJet chief executive, described her company’s performance as very strong. Speaking on BBC Breakfast, she said: “We have got more passengers flying with us and 57% of our leisure passengers are rebooking with us and 62% of business are rebooking with us, so they are demonstrating real loyalty. So I am very pleased with that performance.”

McCall, a former chief executive of Guardian Media Group, has been in charge of easyJet for five years and dismissed rumours that she was planning to leave. “I love working at easyJet. We have a really fantastic team … and there is lots more we can do.”

The airline expects customer numbers to continue to grow and reported that advance bookings for the first half of next year are already slightly ahead of 2014. However, easyJet is warning that it faces increasing costs per seat, reflecting increased staff costs from opening new airport bases and maintaining its ageing fleet. However, the airline will gain from falling oil prices and expects its fuel bill for the first half of the financial year to be £12-22m less than last year.

Powered by Guardian.co.ukThis article was written by Jennifer Rankin, for The Guardian on Tuesday 18th November 2014 09.06 Europe/London

guardian.co.uk © Guardian News and Media Limited 2010


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