British budget airline EasyJet has announced a significant rise in annual profits, demonstrating remarkable resilience in a challenging market. The carrier's success was largely fuelled by its booming package holidays business, which effectively counterbalanced more difficult trading conditions for its core airline operations.
Holidays Division Powers Financial Performance
EasyJet's headline pre-tax profit increased by 9% to £665 million for the year ending 30 September. This represents a £55 million improvement compared to the previous year. The company's holiday arm emerged as the standout performer, with revenue surging 27% to £1.4 billion and delivering £250 million in pre-tax profit.
The holidays division served 3.1 million customers throughout the year, marking a substantial 20% increase. Popular destinations included Majorca, Tenerife, Costa Blanca, Dalaman and Lanzarote, while city break favourites featured Amsterdam, Paris, Prague, Krakow and Barcelona.
Strategic Expansion Amid Market Challenges
EasyJet has been strategically expanding its leisure and city routes to destinations including Cape Verde, Marrakech, Turkey and Egypt. The airline established new bases at Milan Linate, Rome Fiumicino and London Southend airports, while closing underperforming bases in Toulouse and Venice.
The company invested £20 million into new bases in Milan and Rome with eight aircraft, with plans to spend an additional £30 million this winter at these locations. Further expansion will see new bases opening in Newcastle in March and Marrakech – EasyJet's first African base – next summer, each receiving three aircraft.
Future Outlook and Market Response
EasyJet Holidays has already sold 80% of its packages for the first half of the new financial year, with average selling prices increasing in high single digits. The division achieved its profit target earlier than anticipated, prompting the company to set a new ambitious goal of £450 million profit by 2030.
Kenton Jarvis, EasyJet's Chief Executive, stated: "Since setting our medium-term targets in 2023 we have made significant progress, delivering a 46% improvement in profit before tax. EasyJet holidays is today launching an even more ambitious goal, having achieved its target early."
Despite the positive results, EasyJet's shares fell by 2% in early trading and have declined nearly 16% since the beginning of the year, reflecting ongoing concerns about the wider geopolitical and economic environment affecting the airline industry.
