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EasyJet profits soar by 51% as budget airline reaches new heights

  • @heatheranne9

Low-cost airline easyJet's annual profits soared 51 per cent today, after efforts to attract more business passengers saw more 60 million passengers board their aircrafts for the first time.

The Luton-based carrier hailed the success of recent initiatives, such as allocated seating and fast-track security, for boosting its popularity with more affluent, older fliers and business passengers.

Profits increased to £478 million in the year up to 30 September, up from £317 million - while easyJet kept investors happy by revealing plans to dish out a £175 million windfall to shareholders through a special dividend payment.

Chief executive Carolyn McCall said the company was benefiting from its advantage in the European short-haul market as rivals have reduced their operations during recent years.

Easyjet said allocated seating has also proved popular with wealthier retired people, who had been deterred by the boarding experience.

Their targeting of business travellers increased its share of the market by four per cent, with 10 million corporate fliers a year.

The profits haul comes in the face of Britain's hottest heatwave for years and sees easyJet shrug off turbulence hitting rivals such as Ryanair, which recently issued two profit warnings in as many months due to fare pressure, increased competition and Europe's continued economic problems.

But easyJet signalled a tougher start to its new financial year as it faces tough comparisons from a year earlier when pent-up demand after the Olympics produced increased business.

Bookings for the first half are so far flat on a year earlier, according to the firm.

Travel restrictions in Egypt will also impact on first-half trading, while easyJet said airport disruption was another challenge as strikes and a recent power outage at Gatwick has already seen 152 more flights cancelled year-on-year in October alone.

Costs will be another sticking point for the carrier, which is pencilling in a rise of up to £50 million for its annual fuel bill, as well as higher airport charges and maintenance expenses.

EasyJet still expects to increase passenger numbers over the year ahead, with seats flown set to rise by around 3.5 per cent in the first half and 5 per cent in the full year - up from a 3.3 per cent increase in the year to September 30.

The number of those flown in the past year lifted 4 per cent to a new milestone of 60.8 million.

Shares lifted 3 per cent after the results and details of the special dividend payout.

Additional reporting by Press Association