easyJet profits up 31.5%; announce £195m dividend
16.11.11
easyJet has reported a 31.5% increase in underlying profits to £248 million in the year to September 30, at the upper end of analysts expectations, after a sharp rise in the number of business passengers. It also announced payments to shareholders of £195 million after pressure from its founder Sir Stelios Haji-Ioannou, who along with his family control 38% of easyJet's shares.
The improvement was led by a 11.8% increase in passengers, with one million more people using the airline for business travel. Its total revenue was up 16% at £3.45 billion in the year to September. easyjet chief executive Carolyn McCall said the results were achieved, ‘despite the headwinds of higher fuel costs and a weak and uncertain economic outlook’.
The record profits came after it offset a £100 million increase in its fuel bill by focusing on cost controls and improved customer satisfaction levels. Its on-time performance improved by 13 percentage points to 79%. But the airline warned the economic environment remains challenging, while it is facing higher costs, including increased taxation and a £220 million rise in its fuel costs. As a result it is taking a ‘cautious approach’ to expanding its fleet, which will lead to unchanged capacity in the first half of its financial year and growth of around 4% for the year as a whole.
The budget airline said around 45% of winter seats are already booked – about the same level as last year – but warned that weak consumer confidence across Europe will slow the rate at which higher costs can be passed on to passengers. It expects passenger revenues in the first half of its new financial year to increase by ‘mid-single digits’, helped by higher bag charges and other ancillary revenues.
easyJet also announced that it is to trial pre-allocated seating on selected routes from next Spring (see separate story).
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