Profits soar beyond expectations for easyJet

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The Independent Online

Budget airline easyJet today overcame the challenge of soaring fuel costs to post a forecast-beating 9 per cent rise in annual profits.

The Luton-based company, which has added 72 new routes over the last year, revealed profits rose to £68 million - after previously preparing investors for a figure broadly in line with last year's £62 million.

It came after a year in which easyJet carried 29.6 million passengers, up 21 per cent on last year, although it said this growth would fall to around 15 per cent in its new financial year.

Unveiling his last set of results as chief executive, Ray Webster said: "These are commendable results in difficult conditions delivered partly through a strong year-round focus on costs."

Cost reductions and growth in passenger numbers drove the profits improvement, helping easyJet overcome a 77.1 per cent rise in fuel costs over the year to £260.2 million.

Mr Webster said the firm was watching the situation on UK consumer spending carefully, adding: "We do expect it will continue to be a tough environment, particularly in the UK."

He said the expansion of the market through low fares had "pretty much completed" in the UK.

"The rapid period of expansion is a long way behind us," he said. "That opportunity still exists in continental Europe."

EasyJet said total revenues increased by 23 per cent in the year to September 30 to £1.34 billion and its planes were 85.2 per cent full - up from a figure of 84.5 per cent last year.

It said there was likely to be a slight fall in total revenues per seat in the new financial year, while it should achieve mid to high single-digit profits growth.

Mr Webster said he believed the airline - which celebrated its 10th anniversary last week - was in "good shape" for his successor, Andrew Harrison, who is due to take over on December 1.

EasyJet protected itself from higher fuel prices by signing a new contract that will cut maintenance costs by a quarter, increasing crew efficiency and cutting ground handling costs. It also benefited from the introduction of the Airbus A319.

As a result of these actions, costs excluding fuel were 4 per cent lower over the year.

Profits were also boosted by higher fares and a 17 per cent increase in ancillary revenues - income from areas such as food and drinks, hotels and car hire.