After two years of billion-pound losses, Britain’s biggest budget airline has reported a bumper summer as air fares soar.
Between July and September, easyJet made a headline profit of £674m – equivalent to more than £20 in average profit from each passenger.
The Luton-based carrier has revealed its full-year results for the 12 months ending 30 September 2022.
The headline loss will still show a loss for the full financial year of £178m – or £20,000 an hour. But for almost all of the first half, UK travel restrictions were in place.
Less than a year ago, fears about the omicron strain led to the UK imposing the most draconian rules for all arriving travellers. On 30 November 2021, mandatory quarantine was introduced for all travellers while they waited for the results of PCR tests.
The price of aviation fuel doubled between this time a year ago and early summer – but since then it has slipped back to about 50 per cent more. In addition, sterling has slumped against almost all other currencies. But easyJet is well “hedged” – with forward deals to avoid price shocks. Overall, though, expensive oil feeds through to higher fares and less choice.
Yet despite the the cost of living crisis and the UK’s slide into recession, the evidence is that many who can afford a holiday are content to pay high fares to secure some sunshine or skiing.
Over the coming Christmas, fares are 18 per cent higher than in 2021.
A Manchester-Tenerife return flight over Christmas and New Year is currently over £500 return, while peak fares for Gatwick to Geneva – a 100-minute flight – are currently at £1,111 return. Both prices exclude baggage.
The airline’s chief executive, Johan Lundgren, said: “EasyJet does well in tough times. Legacy carriers will struggle in this high-cost environment. Consumers will protect their holidays but look for value and across its primary airport network, easyJet will be the beneficiary as customers vote with their wallets.
“Over the next year, we are targeting customer growth and are well placed to drive returns and margins while maintaining a rigorous focus on cost.”
The package holiday offshoot, easyJet holidays, delivered £38m in pre-tax profits. Ashley Quint, a holiday designer, said the airline is “putting a very big bet on easyJet Holidays”.
He said: “It is completely UK-dependent and has big ambitions of taking market share from Jet2 and Tui, touting the strong frequency and route portfolio. This is going to be a strong narrative going forward – we can see it in the trade already.”
Passengers were hit by hundreds of short-notice cancellations over the summer by easyJet, especially at its main base, Gatwick. The airline says there were “fewer on-the-day cancellations” in late summer than in early summer.
“Ancillary revenue per seat” increased by almost one-third from £15.06 to £19.43.
On domestic routes, easyJet said business travel was back to 95 per cent of 2019 levels.
The airline also revealed plans to install WiFi on all its planes between now and September 2023.
