EasyJet, the discount airline operator, posted record results yesterday, reporting a 48 per cent increase in profit over the previous year on the back of its aggressive expansion and cost-cutting strategies.
The company, which has grown to become Europe's fourth-largest airline in just 12 years, saw underlying profit before tax rise to £191.3m in the year to the end of September. Passenger numbers, which touched 37.2 million, were also up, bringing in more than £1.5bn in revenues, a growth of 9.2 per cent over last year.
The results vindicated the airline's aggressive expansion strategy. Over the past year, easyJet added eight new destinations and 44 new routes, expanding its network to 289 routes covering 21 countries. The company also said that it had added new aircraft to its fleet, taking delivery of 20 Airbus A319s in the past 12 months. Its chief executive Andy Harrison said that this was the best year easyJet had had in its history.
"It's been a good year for us and a good year for our passengers. Although we have seen oil prices go up, we have managed to keep ticket prices down," he said. "The average ticket price in 2007 was the same as the average in 2003...mostly because we managed to cut many of our non-fuel costs."
EasyJet said that a new deal with GE Aviation helped reduce engineering and maintenance costs by 61p per seat, or 21.7 per cent when compared with 2006. The 10-year, £500m agreement will cover the overhaul and maintenance of engines on both Airbus and Boeing aircraft in the airline's fleet.
Analysts at ABN Amro said they anticipated a "modest positive reaction" to the results, but that much depended on the level of confidence easyJet investors had in the guidance for 2008, which predicted a 20 per cent rise in underlying profits before tax. They noted that the market remained nervous about consumer spending and the rising price of oil.