BUDGET airline EasyJet unveiled a 21.5 per cent rise in annual pre-tax profits and a small rise in winter bookings yesterday, shrugging off concerns about a competitive European travel market.
The carrier – famous for its orange livery – posted a profit of £581 million for the year to end-September, in line with an upgraded forecast it made last month.
Cheap fares have helped EasyJet and rival Ryanair win market share in Europe’s short-haul travel sector from traditional airlines such as Air France-KLM and Lufthansa, which have recently announced plans to expand their own budget services. Almost 50 per cent of EasyJet’s winter seats are already booked, slightly up on last year.
“EasyJet has proved that its profit upgrades earlier in the year were fully justified, whilst its outlook remains defiantly upbeat,” said Hargreaves Lansdown head of equities, Richard Hunter.
EasyJet chief executive Carolyn McCall said the group had “opened up clear blue sky between us and our competitors – both legacy and low-cost.”
The airline said it had increased the proportion of bookings made by existing customers to 57 per cent, up from 50 per cent in 2010.
This meant more than 37 million passengers were rebooking each year compared with 25 million four years ago, a 50 per cent increase. The figure for business customers was 62 per cent.
The group said customer loyalty helped it both grow revenue and keep a lid on costs as it was cheaper to retain existing fliers than find new ones. It has recently launched a frequent-flyer scheme to reward its most reliable passengers.
McCall added: “More customers are trying us, liking us and coming back to us. This is testament to our winning formula of low prices and warm, friendly service, as well as our unrivalled network.
“Popular new initiatives such as allocated seating meant many people tried us for the first time and we are absolutely focused on driving loyalty so they choose us flight after flight.”
During the year it started flying from former Flybe slots at Gatwick and opened new bases in Hamburg and Naples while announcing plans to open bases at Amsterdam and Porto.
A strike by Air France pilots in September helped EasyJet boost revenues by £5m.
EasyJet said that passenger numbers were up 6.6 per cent to 64.8 million for the year, while revenue per seat was up 1.9 per cent on a constant currency basis to £63.31 and load factor – a measure of how full its planes are – up 1.3 per cent to 90.6 per cent.
Revenue per seat for the first half was expected to be “flat to very slightly up”, EasyJet said. Its shares dipped 19p to 1,525p.
The stock has soared 18 per cent over the past 18 months.
“There’s nothing in there for the bulls to keep pushing the share price,” Panmure analyst Gert Zonneveld noted.
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