Easyjet flies over fuel costs; reports 9% rise in profit |
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Published
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Tue, 22 Nov 2005 17:05
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LONDON: British budget airline easyJet today proved it had met the challenge of soaring fuel costs by reporting a 9 percent growth in full year earnings.
The group made £68 million pretax profit for the year ended 30 September, up from £62 million last year. Total revenues were up 23 percent at £1.3 billion despite fuel costs surging to £260.2 million, a rise of 77.1 percent year-on-year. In its earlier forecast the company said it expected earnings to equal the previous year’s profits.
The growth was made possible by a higher number of passengers, huge cost cutting, rising fares and new routes. The airline which is regarded as Europe’s second largest among low-fare airlines, had added 72 new routes over the past year.
The group’s earnings also reflect contributions from its other sources of income – in-flight food, car hire and hotels. The airline expects a double-digit growth in these revenues this year.
The results are likely to boost earnings for the current year with costs per seat expected to drop between 3 and 5 percent before fuel.
Chief executive Ray Webster told reporters that the company hoped “to achieve mid-to-high single digit percentage profit growth”. Average fares would drop slightly this year while new contracts with airports and new routes would help lower costs.
The 10 year-old airline has grown impressively from its modest beginnings from a small rented shed in Luton airport. Chief executive Webster is expected to retire next month.
The stock market responded to the earnings news with a 7.1 percent jump in easyJet share prices to 328-1/4 pence.
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Fuel surcharge on airfares to be hiked June 27: BA 