Profits down 65% at easyJet

Budget airline easyJet said today that profits were down 65 per cent on last year but added that it was one of the few carriers to make a surplus in the recession.

EasyJet posted underlying pre-tax profits of £43.7 million for the year to 30 September, compared with £123.1 million in 2008.

The firm said it was an "extremely resilient" performance in the circumstances, but predicted a "tough winter" as rising unemployment takes its toll on demand.

EasyJet said it expected a "substantial" improvement to profits next year as capacity improves and it benefits from the effect of hedging on fuel prices.

The airline's 2009 profits - which were in line with its predictions - were hampered by a double whammy of higher fuel costs and lower income.

Chief executive Andy Harrison said: "This is an extremely resilient performance, making easyJet the best-performing European airline based on our robust yields.

"We are one of the very few European airlines to make a profit during the last 12 recessionary months."

But he said the next few months would be difficult.

"We are focusing our efforts on further cost savings and efficiency improvements together with optimising route profitability and aircraft allocation," he added.

EasyJet carried more passengers in the year - up 3.4 per cent to 45.2 million - and the firm said its European short-haul position had strengthened in the period, with gains in Paris, London Gatwick, Milan and Madrid.

The "no frills" carrier said total revenue per seat had risen 4.1 per cent at constant currency, but 10.9 per cent overall, as competitors cut their capacity by around 6 per cent in the face of the downturn.

In contrast, easyJet said its capacity, measured in seats flown, grew by 1.8 per cent during the year.

The firm said it had focused on higher performing routes, closing 28 while launching 70.

And it has already revealed plans to continue growing, with the aim of upping its share of the European short-haul market from 7 per cent to 10 per cent over the next five years.

The airline has resolved a long-running row with its founder and biggest shareholder, Sir Stelios Haji-Ioannou, over growth plans, agreeing a fleet expansion programme at a rate of 7.5 per cent a year.

Sir Stelios last year increased his personal stake in the business to nearly 27 per cent as the spat intensified, with the easyGroup millionaire wanting the board to consider maintaining dividend payments by scaling back growth plans.