ii view: a 30-year-old easyJet holds high ambition

An easyJet aircraft takes off from Barcelona airport. Photo: Joan Valls/Urbanandsport/NurPhoto via Getty Images.

Full-year results to 30 September

• Passenger numbers up by 4.2% to 93.4 million
• Revenue up 9% to £10.1 billion
• Pre-tax profit up 9% to £665 million
• Net cash held of £602 million, up from £181 million
• Total dividend for the year up 9% to 13.2p per share

Guidance:

• Continues to target an annual pre-tax profit of more than £1 billion over the medium-term
• Targeting a 15% increase in holiday business customers by late 2026, up from 3.1 million in 2025
• Targeting a fleet of 370 planes by end of FY 2026, up from 356 planes in FY 2025 
• Targeting a fleet of 395 planes by 2028 

Chief executive Kenton Jarvis said: 

“Our focus on investing in operations and enhancing customer experience, providing the warmest welcome in travel, has delivered improved punctuality, enhanced customer satisfaction and cost efficiencies this year.

“Having recently celebrated our 30th birthday, I am proud of what easyJet has achieved. Very few companies remain as close to their roots as easyJet - making travel easy and affordable while contributing significantly to economic growth through increased connectivity, consumer choice and jobs.”

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ii round-up:

easyJet (LSE:EZJ) is a short-haul European airline operating a fleet of 356 Airbus aircraft with an average age of 10.9 years and offering an average of 181 seats per plane. Close to three-fifths of its aircraft are owned and the rest leased.  

The Luton-headquartered company operates 1,202 routes to 38 countries between 163 airports. 

For a round-up of these latest results announced on 25 November, please click here.

ii view:

easyJet, which started in March 1995, flew 93.4 million passengers during this latest financial year. This is up from 89.7 million during the financial year 2024 and supported by a 3% increase in aircraft owned and leased. The airline launched 206 new routes during the financial year as well as closing 76 routes. Passenger sales accounted for 60% of revenues with onboard Ancillary revenues, such as extra bags, a further 26%, and packages holidays the balance of 14%. 

For investors, geopolitical tensions and potential for an extension of the war in Ukraine should not be ignored. A planned increase in aircraft numbers could be hindered by recently flagged operational issues at supplier Airbus SE (EURONEXT:AIR). Concerns for the wider industry’s impact on climate change warrants consideration, while the many other factors outside management’s control such as fuel prices, bad weather, air traffic control strikes, and terrorism all deserve thought. 

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On the upside, a medium-term target of more than £1 billion of pre-tax profit continues to be pursued. The group’s growing holiday business now offers diversity not seen at other airlines such as Wizz Air Holdings (LSE:WIZZ). Net debt accumulated under the pandemic has turned to growing net cash, while the shares now sit on an estimated future dividend yield of 2.7% with payment being made as a final dividend only. 

In all, the historic volatility of airline shares should never be forgotten. That said, the twin engines of an airline and holiday business offer appeal, with a consensus analyst estimate of fair value sat at over 600p per share suggesting ongoing optimism in the City. 

Positives: 

• Growing holidays business
• Strong focus on costs

Negatives:

• Uncertain geopolitical and economic outlook
• Many factors outside management’s control can hinder performance

The average rating of stock market analysts:

Buy