easyJet looks forward to 20% growth
Budget airline easyJet today forecast growth of 20% – despite seeing annual profits drop by a quarter in one of the most difficult years on record.
The company said integration of 120 new planes from Airbus, increasing frequency on its existing routes and expanding to new hubs in Europe meant the outlook was good.
EasyJet delivered pre-tax profits of £52m (€75m) for the year to September 30, down 28% after the war in Iraq sharply cut passenger numbers.
The Luton-based carrier, which has 3,370 staff, also absorbed £7.9m (€11.4m) in costs from the integration of smaller rival Go, which it bought last year.
And easyJet had to write off £9.1m (€13.1m) after passing up the option to buy Deutsche BA from British Airways, saying rigid labour laws in Germany would have undermined its low cost model.
The integration of Go spurred two-thirds of the 69% growth in annual revenues to a new high of £932m (€1.34bn), the company said.
Passenger numbers jumped 79% to 20.3 million, with 52% of this increase coming from Go flyers.
Chief executive Ray Webster said the company’s low-cost business model had proved resilient despite the ongoing slump in civil aviation and he was “cautiously optimistic” about the performance in the current year.
“Although there remains a degree of uncertainty, the economic environment is improving and is substantially better than at this time last year,” he said.
The focus for the year would be on integrating 120 planes which it bought from Airbus last year after shocking the industry by switching allegiance from traditional low-cost airline supplier Boeing.
The company is also targeting greater frequency on its 105 routes from 38 airports as this will lift its appeal among business users.
EasyJet added 21 new routes in Europe during the year and announced earlier this month that it is planning to launch 11 routes from a new base at Berlin’s Schonefeld Airport.
There will also be daily flights to a number of European cities, including Palma, Athens and Barcelona.
The impact of an EU ruling against rival no-frills airline Ryanair over the subsidies it receives to fly to Charleroi airport in Belgium would be minimal, the company said.
“Our business model does not rely on the smaller publicly-owned airports that Ryanair has made its bases in continental Europe,” Mr Webster said.
“We certainly don’t expect any other party – the state, the airport or the community – to pay for our operation.”
