EasyJet has posted record profits for a sixth consecutive year as the airliner benefited from strong growth in passenger numbers and falling fuel prices. Pre-tax profits rose by 18% to £686m, which was slightly below analyst expectations of a 20% increase (1).
Results were overshadowed by the coordinated terrorist attacks in France, where EasyJet is the second largest airline. European travel and hotel companies lost more than €2bn on Monday in the wake of the attacks (2). EasyJet shares opened 3.48% lower at 1,721p.
The travel and tourism industry had already been under scrutiny following the downing of a MetroJet passenger aircraft in Egypt two weeks ago in an alleged bombing attack. EasyJet CEO Carolyn McCall stated that increased security measures in the wake of the attacks were inevitable. “It will take a little longer to get though airports, but I do not think that passengers will mind because it has to be safety first,” she said (3). However, McCall emphasised that travellers have been undaunted by previous attacks in London and the U.S.
EasyJet stated its intention to purchase 36 planes by 2021, remaining confident that passenger demand growth will continue despite the recent coordinated terrorist attacks in Paris (4).
It’s important to note that the earnings figures do not include any impact from the suspension of EasyJet flights to Sharm el-Sheikh in Egypt (5), or the ramifications of the attacks in Paris. The key drivers of industry profitability continue to be outside of airliners’ hands as, for example, a reversal of the recent prolonged weakness in fuel prices would impact future profitability.
(1) The Telegraph. ‘EasyJet profits soar to record levels’. Telegraph.co.uk
(2) The Guardian. ‘EasyJet profits hit record for fifth consecutive year’. Theguardian.com