Easyjet profits jump on rising passenger numbers and more business fliers

16.11.2010 (BBC)

Budget airline Easyjet has seen profits almost triple on rising passenger numbers
and cheaper fuel.

The carrier made profits of £154m in the 12 months to September, up from £55m
a year earlier.

Passenger volumes rose 8% in the year to 49 million, helping to push its share
of the European market up to 7.6% from 6.5% a year earlier. Fuel costs were down

The company also said it would pay its first dividend – but not until 2012.

The company’s share price fell more than 4% in the wake of the results’ release,
but this came after a more than 33% rise over the past three months.

Europe strategy

Easyjet is benefiting from the continuing migration of passengers on continental
Europe away from national carriers towards budget airlines – a pattern already
well established in its home market Britain.

“We see clear opportunities for Easyjet to continue to take market share as charter
traffic continues to decline, as weaker short-haul carriers retrench or fail and
as new infrastructure capacity comes on stream,” said Easyjet’s new chief executive,
Carolyn McCall,
commenting on the full-year results.

She expects low-cost carriers like her company to make further headway in France,
Switzerland, Italy, Netherlands and Portugal in the coming months, pushing budget
airlines’ share of these markets to around 50%.

In anticipation of this growth, the airline announced that it would buy another
24 planes by September 2013, representing a 12% increase in its fleet.

Easyjet’s fuel bill fell to £13 per plane seat, down from £15.28 a year earlier.

However, other costs rose 5.2% to £36.15 per seat.   Easyjet blamed most of the
rise on the disruption caused by Icelandic volcanic ash and snow earlier this

Dividend tussle
The decision to start paying a dividend was welcomed by Easyjet’s founder and
biggest shareholder, Sir Stelios Haji-Ioannou, who has been critical of the company’s
previous zero dividend policy.
However, Sir Stelios said he wanted the company to pay out 50% of earnings from
2012, rather than the 20% announced by the company.

Now a 37% minority shareholder, the Easyjet founder recently ended a row with
the airline over whether it could continue to use his “Easy” brand.

The dispute had gone to the High Court, with Sir Stelios claiming the company
was making too much money from peripheral businesses such as car hire, which was
cannibalising his own brands


see also


EasyJet targets business travellers as profits soar

by Graham Hiscott,
Daily Mirror 17.11.2010

EASYJET is launching a no-frills business class after a rise in suited and booted
flyers helped triple profits.

The budget airline banked £188.3million in the year to October as passenger numbers
jumped 8% to 48.8m.

Nearly one in five were travelling on work as price-savvy firms booked bargain

EasyJet is cashing in on the trend by introducing a business fare that costs
more but offers flexibility.

After booking, passengers can bring their departure for ­ward a week or extend
it by three weeks at no cost. Changes can be made up to two hours before the flight.

Also included is a checked-in bag, priority boarding to pick the best seat and
no booking fee.

EasyJet isn’t revealing fares yet but claims they’ll be "far cheaper" than big-name
carriers like British Airways.

Boss Carolyn McCall said: "We’ve seen a growing trend of business travellers
choosing easyJet because we have the best Euro ­ ­pean network and fly to main airports."

The new fare – part of new McCall’s plans to "Turn Europe Orange" by launching
new routes on the Continent – came as easyJet announced it would pay its first-ever
dividend next year if bumper trading continues.

Profits soared 330% on sales up 11.5% to £2.97billion despite the airline being
hit by a triple-whammy of ash cloud chaos, snow disruption and strikes which cost
it nearly £100m.

That’s on top of the bill for renting planes after bad crew planning forced it
to cancel flights. But the airline was boosted by a £73.8m drop in fuel costs
and £55m from baggage fees and other extras.

McCall wants to boost ancillary income after doing a deal with easyJet founder
Sir Stelios Haji-Ioannou to increase tie-ups with car hire firms and hotels.