Competition warning as EasyJet profits soar

Low-cost British airline easyJet today unveiled a 21% improvement in annual profits but warned it expected competition to remain intense this winter.

The Luton-based operator posted a pre-tax figure of £62.2m (€88.7m) for the year to September 30, a performance helped by a 20% gain in passenger numbers to 24.3 million as well as the presence of fewer exceptional items than in 2003.

Chief executive Ray Webster described the results as “creditable” but forecast some challenging months ahead with limited visibility on fares.

Like other airlines, easyJet is facing pressure on overheads after its annual fuel bill increased by almost 22% on a year earlier to £146.9m (€209.6m). That represented 14% of spending and prompted a further drive to focus on costs.

Savings have been achieved through the addition of more fuel-efficient Airbus A319s and the withdrawal from poorly-performing markets or over-priced airports.

During the year, easyJet increased its network to cover 153 routes and 44 airports, up from 105 and 38 respectively, following the addition of services to six cities including Basle, Budapest and Dortmund.

At the same time, easyJet said it faced competition from a flood of new entrants into the low-cost airline market in Europe. There are now at least 47 such operators, compared with seven just three years ago, the group said.