EasyJet has reported a full-year net income of £548 million ($833 million) for the year to September 2015, 21.8% higher than its £450 million profit for 2013-14, following a “solid winter” and a “very strong” summer performance.
“We delivered another set of record results in 2015,” easyJet CEO Carolyn McCall said, briefing analysts on the results on Nov. 17. She added this was the carrier’s fifth year of record pre-tax profits. “EasyJet has delivered an exceptional performance over the last five years, regardless of the economic environment,” she said.
Revenue rose 3.5% to £4.7 billion (6.5% up at constant currency), while expenses increased 1.1% to £3.7 billion, producing an operating profit of £688 million, up 18.4% from a £581 million in the prior year.
Key drivers behind the cost increase were deicing fees, a one-off Eurocontrol settlement, higher than normal disruption, increased passenger compensation payouts and external cost increases, such as airport charges. These were mitigated by exchange rate fluctuations, lower fuel prices and a new maintenance agreement.
Traffic rose 6.4% to 77.6 billion RPKs on a 5.4% increase in capacity to 83.8 billion ASKs, producing a load factor of 91.5%, up 0.9 point. Passenger numbers increased 6% to 68.6 million
Revenue per seat dipped 1.3% to £62.48 as RASK fell 1.8% to 5.59 pence and CASK decreased 3.9% to 4.77 pence. CASK ex-fuel was 3.34 pence, down 1.5%.
McCall said easyJet still has “significant opportunities” for growth, pursuing a “low-risk” strategy of deepening and consolidating its “formidable” network and schedules. On the cost side, easyJet Lean generated £46 million in cost savings in 2015 and is expected to deliver a further £50 million in 2016, via IT and productivity improvements, coupled with increased scale.
More favorable economic trends mean easyJet’s forward bookings are in line with expectations, creating “some confidence” for the year ahead. Over the next five years, the carrier is expecting to increase its passenger numbers by 5%-8%.
“We will see passenger growth of 7% a year, sustaining margins through rigorous cost control and the benefit of fleet up-gauging, resulting in positive profit momentum,” McCall said.
EasyJet’s fuel bill for 2016 is expected to be £140-£160 million lower, creating a “slight decline” in both cost and revenue per seat at constant currency as the savings are passed on to passengers. Exchange rates are expected to have a £15 million negative impact in the first half of the year.