Solid profits expected for easyJet

Low-cost carrier easyJet has given the airline industry a boost by announcing that it expects to make £110 to £120 million pre-tax profit for this year.

Despite a huge £185 million increase in its annual fuel bill, easyJet has still managed to deliver this healthy profit forecast.

As part of a third quarter business statement, the airline indicated that passenger numbers were up by 16 per cent and revenues had risen by 32 per cent in the three months up to June.

This meant that the operator transported 11.5 million people during the last quarter with strong growth experienced at London Gatwick alongside key destinations in France, Spain and Italy.

As part of strong results, revenue-per-seat also rose by 12 per cent to an average of £46.36 alongside passenger revenues growing by four per cent.

The strong euro is believed to have helped easyJet as well as the introduction of a £5 charge for check-in luggage that contributed to a 93 per cent growth in ancillary revenue.

The report indicated that "in the current environment flexibility is vital and easyJet continues to review its schedule".

It added that easyJet may "make further adjustments both to eliminate unprofitable flying and to seize any opportunities that may arise as capacity exits the market".

Across all 365 easyJet routes the performance was described as encouraging, however the airline did announce that around a four to six per cent cut was planned in its winter services.

The success of easyJet is largely down to its ability to offset 50 per cent of price rises through streamlining revenue and performance.

Airline News posted on 25 July 2008

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Solid profits expected for easyJet

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