EasyJet’s profits have dropped by 50% to £54.7 million for the year to September, despite increased passenger numbers, load factors and market share.

The airline blamed higher fuel costs for the drop in profits, as fuel costs for the year were £86.1 million more than last year.

However, a number of key indicators were positive. It managed to increase its market share of the overall European short-haul market by 3.4%, carrying 45.2 million passengers during the year. Load factors were up by 1.2% to 85.5%.

Overall capacity, measured in terms of seats flown (overall number of passengers), was 1.8% up. In the UK, capacity at Gatwick was increased by 12%, giving easyJet a 30% share of airport passengers. Elsewhere, it reduced capacity in weaker performing areas, such as Luton and regional airports.

In Europe, capacity was increased in France, Italy and Spain by 30%, 78% and 16% respectively.

Business travel is important for easyJet, with 15% of business passengers now being booked through business-orientated distribution channels, such as travel management companies. It also revealed business customers tend to book later, paying about 20% more than the average fare for their easyJet flights.

Its appeal to the corporate market, particularly in the UK, has been boosted by legacy competitors’ withdrawal from key business routes.

The website easyjet.com remains the airline’s primary distribution channel. Improvements in website presentation should also result in improved conversion rates for car hire and hotels, it said.

Over the past year the airline has spent £47 million on advertising. Looking ahead, it said that 45% of its seats for the period from now until March 2010 have already been booked, although it is concerned about yield dilution. On the other hand, it expects to save £100 million on fuel costs, prompting it to predict that next years profits will be substantial.