Webster departs from easyJet on high note

Ray Webster, the outgoing chief executive of easyJet, stepped down on a high note yesterday by unveiling better-than-expected profits and an improved outlook for the low-cost airline.

The Luton-based carrier reported a 9 per cent rise in pre-tax profits to £68m for the year to the end of September and indicated it expected a similar improvement in the current year with "mid to high single-digit percentage profit growth". Shares in easyJet soared 11 per cent to 340p - a 21-month high - on the upbeat statement. There was also speculation that Icelandair had been aggressively buying in the market yesterday to add to its 16.2 per cent stake in easyJet.

The increase in profits came despite a 50 per cent rise in the airline's fuel costs. Easyjet helped offset this with a 2 per cent improvement in average revenues per seat and a 4 per cent reduction in costs, excluding fuel.

An emotional Mr Webster, who hands over as chief executive to the former RAC boss Andy Harrison next month after 10 years with the airline, said he had been proud to lead easyJet. "We've been responsible for thousands of life-enhancing experiences and journeys, made millions of introductions and forged countless friendships. We've launched long-distance love affairs, mended broken hearts and helped people realise their dreams," he said in a lyrical farewell statement.

EasyJet carried 29.6 million passengers last year and increased revenues by 23 per cent to £1.34bn. This year the airline expects to grow by a further 15 per cent and at the same time cut controllable costs by 3 to 5 per cent. However, it expects yields or average fares to decline slightly over the next 12 months because of the cut-throat nature of the low-cost airline industry. "The competitive environment is not changing. It is still tough out there," Mr Webster said. "There is an oversupply of seats in some markets which is unsustainable."

He said the engine for growth would be continental Europe, where revenues increased 78 per cent to £247m last year with easyJet's German operation performing particularly well.

The new management team, which includes a new finance director, chief operating officer and chief commercial officer, is on a long-term bonus scheme linked to achieving a 15 per cent return on equity over the next three years.

Mr Webster said easyJet continued to view the Icelanders as strategic and supportive investors who had spotted an undervalued company when they bought into it last year. He said he will devote himself to his family in his native New Zealand while also building a portfolio of non-executive roles.