easyJet strategy delivers profitable first half result
easyJet has released profitable financial results for the six months ending on March 31, 2015.
Total revenue per seat increased by 2.6 per cent year-on-year on a constant currency basis, and by 0.2 per cent per seat on a reported basis, to £54.91 driven, in part, by the disciplined allocation of capacity, improvement in load factor, strong October trading, timing of Easter and performance of allocated seating.
Average load factors increased by 0.7 percentage points to 89.7 per cent whilst capacity grew by 3.6 per cent to 32.2 million seats.
Cost per seat excluding fuel grew by 2.9 per cent on a constant currency basis and decreased by 1.4 per cent on a reported basis to £38.66. The increase in cost per seat was driven by anticipated increases in charges at regulated airports mainly in Germany and Italy, increased disruption costs in the second quarter and costs associated with building a resilient operation ahead of new crew base openings.
easyJet lean delivered £21 million of sustainable savings in the six months to March 31, 2015.
From May 2016 all future deliveries of A320 aircraft to have 186 seats; existing A320 180 seat fleet to be retrofitted starting in winter 2016. 186 seat A320 expected to deliver a cost per seat saving of two per cent vs. a 180 seat A320.
Furthermore, a component support contract was signed with AJW Group to drive savings in maintenance costs from October 2015.
In the six months to March 31, 2015, easyJet returned £180 million or 45.4 pence per share to shareholders through the payment of an ordinary dividend at an increased payout ratio of 40 per cent of profit after tax for the year ended September 30, 2014.
easyJet ended the first half of the financial year with cash and money market deposits of £976 million, a decrease of £93 million against last year. Net cash as at March 31, 2015 was £416 million compared to £449 million at March 31, 2014.
“easyJet has delivered a record performance in the first half of the year by continuing to deliver its strategy of making travel easy and affordable for passengers,” commented Carolyn McCall, chief executive at easyJet. “The profit in the half reflects the delivery of our customer focused revenue initiatives and a strong finish to the ski season as well as the benefit we received from the lower fuel price and favourable foreign exchange movements.
“As we enter the important summer season forward bookings are in line with last year and as we predicted passengers are benefiting as fares fall to reflect a more competitive operating environment and lower fuel costs. easyJet continues to be well positioned to grow revenue and profit this year, delivering sustainable returns to shareholders due to its compelling network, low-cost base and strong balance sheet.”
easyJet connects Pafos with London Gatwick, London Luton, Bristol, Edinburgh and Manchester, and Larnaka with Basel, London Gatwick, Liverpool, Milan Malpensa and Berlin Schönefeld.