easyJet profit soars on rising passenger numbers
Budget airline easyJet has today said profits have been boosted by a rise in passenger volumes and the group said it will pay its first ever dividend in 2012.
The no-frills airline said passenger numbers grew 8% in the full-year to the end of September to 49 million, while profits totalled £154 million in the period – against £55 million a year earlier.
Meanwhile, revenues were up 11.5% to £2.97 billion.
Commenting on today’s results, the airline’s chief executive, Carolyn McCall, said: “We see clear opportunities for easyJet to continue to take market share as charter traffic continues to decline, as weaker short-haul carriers retrench or fail and as new infrastructure capacity comes on stream.”
She added: “We therefore intend to commence the payment of an annual dividend based on a dividend cover of five times.”
Ms McCall said she anticipates that low-cost carriers like easyJet to make further progress in France, Switzerland, Italy, Netherlands and Portugal in the short-term.
Shares in the airline have risen by around 30% this year but were down 4% this morning to 453.4p.
The news marks a significant turnaround after European airlines suffered much disruption earlier this year, due to the volcanic ash cloud from Iceland which led to flights being cancelled.
Furthermore, the global economic downturn had a devastating impact on the airline industry, which led to a slump in demand as fewer people travelled by air.
Many airlines went bust during the downturn, not just due to a fall in demand but also as a result of higher fuel prices.
However, just two months ago, the International Air Transport Association (IATA) revised its forecasts for the airline industry and said the recovery had been “stronger and faster than anyone predicted”.
According to the industry body, global airlines will make profits of $8.9 billion (£5.7 billion) in 2010.
The figure is a sharp upward revision from the one it made in June when it forecast a profit of $2.5 billion, while in March, it anticipated a loss of $2.8 billion.
IATA has previously described 2009 as “ the worst year the industry has ever seen.”