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EasyJet pledges higher dividend as profits jump

Europe’s second-largest budget airline reported a pretax profit of 317 million pounds

Gulf News

London: British low-cost airline easyJet pledged to pay a higher dividend on Tuesday after outperforming the sector with a 28 per cent rise in full-year profit that was helped by a surge in late summer demand.

Europe’s second-largest budget airline after Ryanair reported a pretax profit of £317 million (Dh18.5 billion) on revenues 11.6 per cent higher at £3.85 billion for the year to the end of September.

In October easyJet had said it was expecting to report an annual pretax profit of between £310 million and £320 million.

Luton, southern England-based easyJet more than doubled its full year dividend to 21.5 pence from 10.5 pence and announced plans to increase future handouts to shareholders.

“In light of the continued strong financial performance of easyJet and the confidence in easyJet’s position within European short-haul aviation, the board has decided to amend the dividend policy from this year,” said Carolyn McCall, who has helped double the airline’s profits since she took over as chief executive in July 2010.

The group will seek “to pay out one-third of profit after tax each year, up from the one-fifth payout introduced last year.”

EasyJet’s strong performance bucks tough conditions elsewhere in the airline sector where several carriers have been hit by a toxic mix of high fuel costs, weak consumer confidence and the eurozone crisis.

Earlier this month IAG’s Spanish airline Iberia announced plans to axe almost a quarter of its workforce and rationalise its network under a restructuring plan, while Germany’s Lufthansa, which has already slashed hundreds of jobs, said it would step-up cost-cuts to counter rising fuel prices and limited growth in its core market.

Since the start of the year airlines including loss-making Spanair and Hungarian flag-carrier Malev have ceased operations, leaving gaps in the market that low-cost competitors have been quick to exploit.

EasyJet, the largest carrier at London’s Gatwick airport, said a strong rise in summer bookings from Britain to Malaga and Alicante in Spain and Faro in Portugal had helped, while it also increased the number of flights between top business destinations during the year.

The carrier said passenger numbers rose 7.1 per cent to 58.4 million during the year, with load factors — a measure of how full its planes are — up 1.4 percentage points to 88.7 per cent.

The airline, which will fly between London, Manchester and Moscow from next year, said its profit margins grew by one percentage point to 8.2 per cent during the year, despite a £182 million increase in its fuel costs.