EasyJet’s Profit Surge Drives the Acquisition of Additional Planes

EasyJet has announced plans to purchase additional aircraft and reintroduce dividends following a successful summer season that resulted in record-breaking profits.

The budget airline revealed its intention to acquire 157 short-haul planes for delivery starting in 2029, adding to its current fleet of 336 aircraft. Furthermore, EasyJet has 315 more planes on order for the next decade, with the option to buy an additional 100.

Johan Lundgren, CEO of EasyJet, stated, “This will enable fleet modernisation and growth to continue… while providing substantial benefits including cost efficiencies and sustainability improvement.”

Expanding its fleet allows the British company to increase seat availability on routes from popular European destinations like London Gatwick and Amsterdam, where limited slot availability restricts the addition of more flights.

During the three months leading up to September, EasyJet reported profits between £650m and £670m, marking its most successful fourth quarter to date. This growth was fueled by an 8% increase in passengers, totaling 26 million, and a 9% rise in fares compared to the same period last year.

The airline generated £3.1bn in revenue during the fourth quarter, with £790m earned from passenger extras alone, a significant increase from the £641m earned in the same period last year. EasyJet expects total extra revenue, including payments for seat selections, extra baggage, and food, to reach £2.2bn this year, up from approximately £1.6bn in 2022.

Following a strong summer season, EasyJet has decided to reintroduce dividends, which had been suspended during the pandemic. The company’s full-year profits are projected to reach as high as £460m, thanks in part to a greater-than-anticipated boost from its holidays arm.

CEO Lundgren also outlined new business targets, including aiming for profits of £1 billion in the medium term. Analyst Richard Hunter from Interactive Investor remarked, “EasyJet is in fine fettle at the moment.” However, he cautioned that investing in airline shares is challenging, as external factors can disrupt progress, as demonstrated by recent events.

Despite positive outlook and performance, EasyJet’s share price fell by 7% (30.5p) to 406.3p, and the stock remains down 56% over the past five years. The company expects a 15% year-on-year increase in flight capacity and higher prices for the final three months of the year.