No-frills carrier easyJet has recorded a better-than-expected annual profit haul as strong demand for its package holidays helps offset more difficult trading for its airline.
The Luton-based group posted a 9% rise in headline pre-tax profits to £665 million for the year to September 30, up from £610 million in 2023-24 and higher than the £650 million most analysts were expecting.
Its growing holidays business was the star performer, with annual earnings surging 32% to £250 million, seeing the group meet its earnings target early.
This resulted in the group hiking the earnings target for it holidays arm to £450 million by 2029-30.
But annual headline profits at its airline dropped to £415 million from £420 million the previous year, and it said the carrier’s performance has been “more challenging” to improve than previously hoped, particularly over winter.
It said this was due to “the pace of route maturity and the wider geopolitical, macro-economic and competitive environment in specific markets”.
EasyJet cut seat capacity growth for its airline for the year ahead, to around 7%, down from 9% in 2024-25.
“We are convinced that our actions through winter are the right ones to drive productivity and utilisation benefits while ensuring that the airline is well prepared for the key summer season, which is vital to overall profit growth,” easyJet said.
Its holidays business grew customer numbers by a fifth to 3.1 million as revenues rose 27% thanks to an increase in average selling price of 5% to £698.
The group expects to grow holidays customers by 15% in the year ahead, with average prices set to increase by “high single digits”.
Chief executive Kenton Jarvis said he was confident of reaching the group’s medium-term annual profit goal of more than £1 billion.
He said: “Since setting our medium-term targets in 2023 we have made significant progress, delivering a 46% improvement in profit before tax, adding 9% this year through the continued, successful execution of our strategy.
“EasyJet holidays is today launching an even more ambitious goal having achieved its target early.”
“We are well placed to seize the significant opportunities ahead, and we are confident in achieving our medium-term goal of delivering over £1 billion in profit before tax,” he added.
This article was written by Holly Williams from The Evening Standard and was legally licensed through the DiveMarketplace by Industry Dive. Please direct all licensing questions to legal@industrydive.com.