Newspaper article The Evening Standard (London, England)

EasyJet Spreads Wings Further as Profits Soar; CITY BRIEFING

Newspaper article The Evening Standard (London, England)

EasyJet Spreads Wings Further as Profits Soar; CITY BRIEFING

Article excerpt


THE slowdown in consumer spending is failing to hurt the budget carriers, easyJet said today as it unveiled plans for further assaults on the continental European airline market.

Announcing a strong increase in profits - ahead 11% in the summer to bring in pre-tax profits for the year to September of [pounds sterling]68 million, up 9% - chief executive Ray Webster said: "We are not seeing the slowdown in consumer spending that they are seeing on the High Street.

"That's just not coming through to us and that is why we are announcing plans to increase capacity this year by another 15%."

Much of that growth is likely to come in the air over Germany.

With continental Europe for the first time making up more than half of easyJet's revenues, Webster revealed plans to open further bases in Germany in addition to the hubs it has set up in Berlin and Dortmund. The airline will have its eyes firmly set on transporting the armies of football supporters expected to flock into Germany from throughout Europe during next summer's World Cup finals.

Webster, who steps down at the end of the month, also confirmed plans to fly beyond the European Union, to Russia and North Africa.

While easyJet forecasts that increasingly competitive markets will cut its yields - the profits it makes per seat sold - Webster said the carrier expects to more than make that up in growth from selling passengers other goods.

Profits were held back by a 47% rise in fuel costs, and easyJet is trying to ensure it does not get hit again next year by locking in prices on 50% of its winter usage at or around current levels.

The upbeat message sent easy-Jet shares taking off to a 20-month high, up 131/2p at 320p. The shares have risen 170% since crashing to an all-time low last year when the carrier was warning about the effects of increased competition.

Much of that recovery has been fuelled by speculation that founder and 41% shareholder Stelios Haji-Ioannou could sell out to the financiers behind carrier Icelandair, who have built up a 16% stake in easyJet. …

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