Profits at Easyjet jump by 21.5% as it eyes further growth

British low-cost airline easyJet shrugged off concerns about an increasingly competitive European travel market, saying it was positioned to deliver further growth after annual profits jumped 21.5 per cent.

Cheap fares have helped easyJet and rival Ryanair win market share in the European short-haul travel sector, against traditional airlines like Air France-KLM and Lufthansa who have recently announced plans to compete more aggressively.

easyJet reported pretax profit of £581 million (€727m) for the year ended September, in line with upgraded company guidance in the range of £575 million to 580 million, compared to the £478 million it made in the prior year.

The company said it would lift its ordinary dividend per share by 35.5 per cent to 45.4 pence, in line with a proposal made earlier this year to reward shareholders with 40 per cent of pretax profit, above the previous one-third distribution. “easyJet is successfully executing its strategy of offering its customers low fares to great destinations with friendly service so that it will continue to win in a more competitive market. This means easyJet is well placed to continue to deliver sustainable returns and growth for shareholders,” the company said in a statement.

The company, Europe’s no.2 low-cost carrier after Ryanair, said forward bookings for the winter season were slightly ahead of last year, and its exposure to Europe’s primary airports, where new slots are not readily available, would help attract more customers.

Ireland’s Ryanair has recently been moving into space traditionally occupied by easyJet - improving its formerly much criticised customer service and planning to expand into primary airports used by business travellers. That strategy and a surge in winter bookings helped Ryanair raise its annual profit forecast by almost 20 per cent earlier this month.

Reuters