Shares of EasyJet Rise as Annual Profits Surge
Shares of EasyJet (LON:) rose on Wednesday after the company reported a significant jump in its annual profits, driven by growing demand for its flights and holiday packages, as well as improvements in reducing its traditionally challenging winter losses.
The company reported a headline profit before tax of £610 million for the fiscal year ending September 30, 2024, a 34% surge from the previous year’s £455 million. The airline also recorded a particularly strong performance in the second half of the year, with profits reaching a record £960 million during this period.
EasyJet’s passenger numbers rose by 8% year-on-year, reaching 89.7 million, supported by an expanded network and the addition of new routes. The company’s package holiday division, EasyJet Holidays, also reported growth, contributing £190 million in profits before tax, a 56% increase year-over-year, thanks to a 36% rise in customer numbers.
The company made significant strides in minimizing its winter losses, which decreased by £40 million compared to the previous year, attributed to increased operational efficiencies, including better aircraft utilization and expanded holiday offerings. Despite industry-wide inflationary pressures, EasyJet maintained a tight control on costs, with its cost per seat excluding fuel rising only marginally.
For the upcoming fiscal year 2025, EasyJet expects to increase its seat capacity by 3% and anticipates reducing winter losses further, forecasting a strong start in the first quarter of the new financial year. The company also plans to grow its customer base by another 25% in 2025.
Analysts at RBC Capital Markets expect upward pressure to consensus forecasts in FY25E, driven by an expected 10% reduction in fuel cost per seat in the first half and a slight reduction in headline cost per seat excluding fuel in the first half.
