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EasyJet annual profit drops 30% as competition bites

21 November 2017

Total revenue increased 8.1 percent to 5.05 billion pounds from 4.67 billion pounds previous year, reflecting a currency benefit, strong ancillary revenue and increased load factors, alleviating ticket pricing pressures.

"EasyJet's model is resilient and sustainable and we now have a huge amount of positive momentum", said chief executive Carolyn McCall.

EasyJet also cut its proposed ordinary dividend per share by almost a quarter to 40.9p, with total basic earnings per share dropping 30 per cent, saying it was in keeping with the firm's increased payout policy of 50 per cent of headline profit after tax.

"Our planned approach of achieving number one or two positions at Europe's leading airports, friendly and efficient customer service and a continuous focus on sustainable cost control has put easyJet at a strategic advantage during a period when there have been bankruptcies and some airlines have struggled operationally", she added.

In the 2017 year, easyJet flew 80.2 million passengers, up 9.7 percent year on year.

EasyJet's pretax profit for the year ended September 30 fell 17% to £408 million, according to a statement, in line with guidance given in October, hurt by the slide in sterling and a glut of seating in European markets.

EasyJet said the battle for business with competitors, such as Ryanair, left revenues per seat falling 7.8% at constant currency - meaning the effects of fluctuations in the value of the pound are stripped out. Load factor was at 92.6 percent compared to 91.6 percent, a year ago.

The no-frills carrier said trading in its first quarter was "encouraging" - suggesting it was benefiting from the demise of Monarch Airlines, which collapsed last month in the wake of similar turbulence at Air Berlin and Alitalia.

EasyJet also noted that its forward bookings were ahead of a year ago at 88 percent for the first quarter and 26 percent for the second quarter. Shares in the company rose 0.7 percent at the news.

As part of the agreement, the FTSE 100-listed budget airline will buy some of Air Berlin's assets at Berlin's Tegel airport, including its landing slots, and leases for up to 24 A320 aircraft. The acquisition should close next month, it said.

EasyJet annual profit drops 30% as competition bites