EasyJet profits slump in ‘difficult year’

EasyJet profits slump in ‘difficult year’

EasyJet saw annual pre-tax profits slump by 17% to £408 million in a “difficult year” for the airline industry which saw the failures of Monarch and Air Berlin.

Profit for the year to September 30 was affected by a £101 million hit from adverse currency movements.

The figure fell from £494 million in the previous 12 months despite the budget airline achieving record passenger carryings up 9.7% to 80.2 million at an improved load factor of 92.6%.

Total revenue was up by 8.1% to more than £5 billion although revenue per seat was flat at £58.23, reflecting strong ancillary revenue, up by 17.8% to £986 million.

Passengers are now making 27% of all easyJet e-commerce bookings through mobile platforms, an increase of 5.4 percentage points year-on-year as functionality and accessibility improve further. Almost a quarter are using mobile boarding passes.

Three quarters of seats in the year were booked by returning passengers, representing an increase of nearly six million compared to 2016.

Business passenger numbers rose by 3.6% and now make up 16% of the airline’s customer base despite a backdrop of capacity grown weighted towards leisure routes.

Outgoing chief executive Carolyn McCall, who is leaving to head ITV, said: “EasyJet delivered a robust performance during a difficult year for the aviation industry, flying a record 80 million passengers at our highest ever annual load factor of 92.6% whilst growing capacity by 8.5% and revenues by over 8.1% to more than £5 billion.

“Our planned approach of achieving number one or two positions at Europe’s leading airports, friendly and efficient customer service and a continuous focus on sustainable cost control has put easyJet at a strategic advantage during a period when there have been bankruptcies and some airlines have struggled operationally.”

McCall, who is being replaced by former Tui deputy chief executive Johan Lundgren on December 1, added: “EasyJet’s model is resilient and sustainable and we now have a huge amount of positive momentum which will enable the airline to continue to grow profitably.”

The airline will continue a strategy of “purposeful investment” to drive profitable growth to secure leading positions at primary airports, increasing returns over the long-term.

Capacity is due to rise by around 6% for the 2018 financial year, excluding Air Berlin aircraft being added at part of a €40 million deal to take on part of the German carrier’s operations at Berlin Tegel airport, subject to antitrust and regulatory approvals.

Forward bookings are ahead of last year at 88% for the first quarter and 26% for the second quarter.

Revenue trends in the first quarter have been encouraging, primarily as a result of some capacity leaving the market, easyJet added.

The airline is “well prepared” for Brexit following the award of an Air Operator Certificate and airline operating licence in Austria.

EasyJet Europe will operate with more than 10 aircraft by the end of 2017 and is in the process of registering more aircraft over the next 12 months.

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