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Easyjet sees profits drop by 50% Easyjet sees profits drop by 50%
(20 minutes later)
Budget airline Easyjet has reported a big fall in full-year profits to the end of September, after the rising price of oil pushed up fuel costs.Budget airline Easyjet has reported a big fall in full-year profits to the end of September, after the rising price of oil pushed up fuel costs.
Pre-tax profits were £54.7m ($92.2m), a drop of a half on the £110.2m the airline made a year earlier. Pre-tax profits were £54.7m ($92.2m), half of the £110.2m the airline made a year earlier.
This came despite a 13% rise in sales from £2.36bn a year ago to £2.67bn.This came despite a 13% rise in sales from £2.36bn a year ago to £2.67bn.
Easyjet said the results were "extremely resilient", adding it was one of the "very few" European airlines to make a profit in the past 12 months.Easyjet said the results were "extremely resilient", adding it was one of the "very few" European airlines to make a profit in the past 12 months.
It was helped by a capacity reduction of about 6% among its main competitors, and increased market share in "valuable" markets such Paris, London Gatwick, Milan and Madrid.It was helped by a capacity reduction of about 6% among its main competitors, and increased market share in "valuable" markets such Paris, London Gatwick, Milan and Madrid.
Passenger numbers rose by 3.4% to 45.2 million.Passenger numbers rose by 3.4% to 45.2 million.
Fuel prices 'Fuel hedging'
"We are doing exceptionally well at the moment," Andy Harrison, Easyjet's chief executive, told the BBC. "We are doing exceptionally well at the moment," Easyjet's chief executive Andy Harrison told the BBC.
The reason, he said, was because the airline offered "great value, the best prices and the most convenient airports".The reason, he said, was because the airline offered "great value, the best prices and the most convenient airports".
Mr Harrison said the airline had been hit by its fuel hedging policy, in which it buys fuel at prices agreed in advance. Movements in the price of oil meant that the company had lost out in the year to September.Mr Harrison said the airline had been hit by its fuel hedging policy, in which it buys fuel at prices agreed in advance. Movements in the price of oil meant that the company had lost out in the year to September.
However, he said the airline should benefit to the tune of £100m in 2010 from its fuel-buying policy.However, he said the airline should benefit to the tune of £100m in 2010 from its fuel-buying policy.
'Substantial improvement''Substantial improvement'
Mr Harrison said that passenger fares would be "flat or slightly down" in the year ahead.Mr Harrison said that passenger fares would be "flat or slightly down" in the year ahead.
The airline also warned of a "tough winter ahead", and said it would continue to focus on cutting costs and improving efficiency.The airline also warned of a "tough winter ahead", and said it would continue to focus on cutting costs and improving efficiency.
These, together with the savings made on fuel hedging, mean it expects to make a "substantial profit improvement in 2010".These, together with the savings made on fuel hedging, mean it expects to make a "substantial profit improvement in 2010".
Earlier this month, Easyjet's rival Ryanair reported a fourfold increase in six-month profits. Earlier this month, Easyjet's rival Ryanair reported a fourfold increase in half-year profits.
Half-year pre-tax profits came in at 419.4m euros ($627.6m; £372.3m), up from 105.2m euros in the same period last year. Pre-tax profits came in at 419.4m euros ($627.6m; £372.3m), up from 105.2m euros in the same period last year.