EasyJet annual profits have soared by 51% to £478 million and the airline is to expand from Gatwick after acquiring slots from Flybe.
The budget carrier has exercised six remaining aircraft options under a current agreement with Airbus for delivery in spring 2015 following the acquisition of the Gatwick take-off and landing slots.
EasyJet saw passenger numbers rise by 4% in 2012/13 to 60.8 million with revenue per seat up by 7% to £62.58.
This was driven by a “benign capacity environment and positive management action including allocated seating, improvements to easyJet.com and the ‘Europe by easyJet’ campaign,” the carrier said.
Total revenue was up by 10.5% to £4.2 billion for the year ending September 30.
The airline is recommending a return to shareholders of £175 million in the form of a special dividend of 44.1p a share.
This is in addition to the regular ordinary dividend of £133 million or 33.5p a share based on its existing policy of paying out one third of annual profit after tax.
Chief executive Carolyn McCall said: “EasyJet has delivered a strong full-year performance and made significant progress against executing its strategic priorities.
“The results reflect easyJet’s continued structural advantage in the European short-haul market against both the legacy and low-cost competition.
“Our disciplined approach to capacity allocation has resulted in a meaningful growth in earnings, profit margin and return on capital employed and we have ended the year with a strong balance sheet and a low level of gearing.
“As evidence of our continued confidence in the future prospects of the business the board has recommended to return £308 million to shareholders through the combination of an ordinary and special dividend.
“We will continue to deliver our strategy of offering our customers low fares to great destinations with friendly service so that we can continue to win in a more competitive market. This means we are well placed to continue to deliver sustainable returns and growth for our shareholders.”
McCall told the BBC that costs at the airline were up 4% mainly due to fuel but that it was trying hard not to pass this on to customers.She said easyJet ran a tight ship and did not have large overheads like expansive headquarters.
McCall put the successes at easyJet down to it new allocated seating policy and the new flexi-fares aimed at corporate travellers, as well as its very strong network.
Average fares at the airline remain at just £62, McCall said, having been challenged about increases running ahead of inflation.
“The rise in airfares has been across the board because a lot of capacity has come out of the market. This winter there is definitely more capacity in the market and you should see that reflected in fares,” she added.
Joshua Raymond, chief market strategist of Cityindex.co.uk, responding to the increased easyJet profits, said: “The numbers come in stark contrast to the difficulties suffered by its rival Ryanair, and the fact they continue to perform strongly and are happy to repay investor faith with a generous special dividend means shareholders will likely react positively to these results.
“Shares are up almost 80% in the last year and so its easy to see why easyJet has been a favourite of investors.”
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