Budget airline easyJet has revealed plans for an overhaul to slash costs after seeing annual profits nosedive by more than a quarter.
The low-cost carrier said it was planning a group-wide review over the next year to make it a “simpler, more efficient” company and to deliver “meaningful” savings, with more details to be given over the year ahead.
EasyJet suffered a 27.9 per cent drop in pre-tax profits to £495 million for the year to 30 September, down from £686m a year earlier, after the plunging pound cost it £88m and it suffered a hit of about £150m from “unprecedented” events.
Airlines have been knocked by a combination of terror attacks across Europe, Egypt and Tunisia, air traffic control strikes in France, political turmoil in Turkey, as well as intense competition in the sector.
Chief executive Carolyn McCall said it had been a year of “significant challenges”, but added the group had delivered a “resilient performance”, with a record 73.1 million passengers carried over the year, although revenues still fell 0.4 per cent to £4.67 billion as the carrier cut fares.
EasyJet also faces ongoing woes from the Brexit-hit pound, forecasting another £90m impact over the financial year ahead, with £70m of that coming in the first half alone. But it will be helped by lower fuel costs, which it expects to fall by between £245m and £275m in the year.
McCall said EasyJet will increase its capacity by 9 per cent in the coming year, adding: “In a tougher operating environment strong airlines like EasyJet will get stronger, and we will build on our already well-established network.”
Despite uncertainties created by the Brexit vote, EasyJet said nearly half of its growth will be in the UK in 2017. It is planning double-digit growth in London and other key bases, such as Manchester, Venice, Berlin and Amsterdam.
An EasyJet spokesman said the group review was not about job cuts, with the firm expected to employ more people year-on-year as it expands from 250 aircraft to more than 300.
He added the overhaul was “not an overnight cost-cutting exercise”, but an efficiency programme that would be carried out over the next two years, including looking at ways to use data and digital to bolster engineering and services.