The no-frills airline easyJet has reported a significant annual profit increase, driven by a surge in demand for its package holidays. This financial success was recorded for the year ending September 30, with pre-tax profits climbing by 9% to £665 million, an increase from £610 million in the previous year.
Strong Performance in Package Holidays
easyJet’s holiday division was a standout performer, witnessing a remarkable 32% growth in annual earnings, which reached £250 million. This robust performance allowed the airline to meet its earnings target sooner than anticipated, prompting a revision of its holiday earnings forecast to £450 million by the fiscal year 2029-30.
Challenges in Airline Operations
Despite the positive results from its holiday segment, the airline business faced challenges, with headline profits dipping to £415 million from £420 million the previous year. The company acknowledged that improvements in airline performance are more demanding than initially expected, especially during the upcoming winter season.
Factors Affecting Airline Performance
Key issues affecting easyJet’s airline operations include:
- Pace of route maturity
- Geopolitical factors
- Macroeconomic influences
- Competitive conditions in specific markets
Capacity Growth Adjustments
In light of these challenges, easyJet reduced its capacity growth forecast for the airline segment to approximately 7% for the coming year, down from 9% previously projected for 2024-25. The company emphasized that these strategic adjustments aim to improve productivity and prepare for a crucial summer season, which is pivotal for profit growth.
Customer Growth and Revenue Insights
In its holiday segment, easyJet successfully increased customer numbers by 20%, reaching 3.1 million. Revenues surged by 27% due to a 5% rise in average selling prices, now at £698. The airline anticipates a 15% growth in holiday customers for the next year, with average prices expected to increase by “high single digits.”
Looking Ahead
Chief Executive Kenton Jarvis expressed confidence in reaching the company’s medium-term profit target of over £1 billion. Since setting these targets in 2023, easyJet has achieved a 46% improvement in pre-tax profits, with this year alone contributing a 9% increase.
Jarvis noted, “With our holiday division now launching a more ambitious goal after hitting its prior target early, we believe we are well positioned to capitalize on significant opportunities ahead.” He remains optimistic about achieving the group’s profitability objectives in the near future.
