A strong performance by easyJet’s package holidays arm helped fuel a surge in annual profits for the UK budget airline.
The carrier today reported a pre-tax profit up by 34% year-on-year to £610 million. EasyJet saw total revenue for the year rise by 14% to £9.3 billion with passenger carryings of 89.7 million against 82.7 million the previous year.
EasyJet holidays saw its profits soar by 56% to £190 million in the 12 months to September 30 as passenger levels rose by 36%.
This took its UK market share from 5% to 7%, “executing strong progress towards the medium-term target of over £250 million profit before tax,” the carrier said.
“This growth is being delivered through strong customer satisfaction of 84%, with 82% of customers likely to re-book,” easyJet added.
“As the holidays business grows in scale, targeted investments will be made to strengthen the customer base.
“Future initiatives are underway to optimise pricing and increase the attachment rate, such as improving the city proposition, alongside enhancing the product offering through dynamic inventory and further ancillary products.
“Our multi-currency technology platform enables expansion into other source markets, as demonstrated through the launch of our Swiss, French and German markets.”
The in-house tour operation is projected to see customer numbers rise by 25% in the next financial year from a base of 2.6 million.
Overall capacity by the airline is set to increase by 3% to 103 million seats.
The carrier expects traditional winter losses to be cut with a “significant improvement” over the next two quarters.
“These results represent a positive momentum towards our target to sustainably generate over £1 billion profit before tax,” the airline added.
Chief executive designate and current chief financial officer Kenton Jarvis said: “The outlook for easyJet is positive and travel remains a firm priority with consumers who value our low fares, unrivalled network and friendly service.
“The airline will continue to grow, particularly on popular longer leisure routes like North Africa and the Canaries and we plan to take 25% more customers away on package holidays, as easyJet holidays continues to thrive.
“I am looking forward to taking over the controls of this fantastic business in the new year and we still have a lot to go for as we progress towards our ambitious targets.”
Outgoing chief executive Johan Lundgren said: “This strong performance – resulting in a 34% increase in our annual profits – reflects the effectiveness and execution of our strategy as well as continued popularity of our flights and holidays.
“It also represents a significant step towards our goal of sustainably generating over £1 billion annual profit before tax.
“It has been a privilege to lead easyJet for the past seven years. I am extremely proud of all that has been achieved, which is a result of the hard work of the entire team.
“I am pleased to be leaving a strong easyJet, the future for the company is bright and I look forward to seeing Kenton delivering his ambitious plans, generating positive shareholder returns while making low-cost travel easy for millions of customers.”