Last-minute rush for the sun provides a boost to easyJet profits

Europe’s second-largest budget airline after Ryanair said yesterday it now expects to report a pre-tax profit of between £310m and £320m for the year to the end of September, having previously predicted a result of £280m to £300m.

“Following the end of the Olympic Games demand from London increased towards the upper end of expectations with the late market and beach routes performing particularly well,” said chief executive Carolyn McCall, adding that the carrier was “well placed to continue to succeed” despite a European economic outlook which she called “highly uncertain”.

EasyJet, the largest carrier at London’s Gatwick airport, said a strong rise in summer bookings from Britain to Malaga and Alicante in Spain and Faro in Portugal had helped revenue per seat by as much as 5.5 per cent in the last six months. Annual passenger numbers rose by 7.1 per cent to 58.4 million.

Some 40 per cent of easyJet’s flights are to or from Britain, with around a quarter of its 193-plane fleet based at Gatwick.

EasyJet said its performance on routes within mainland Europe also improved during the year, helped by growth on Swiss services and the addition of French regional services. Profits have doubled since McCall took over as chief executive in July 2010.

“McCall’s second full year in charge has delivered another impressive increase in profits. That’s no mean feat in view of the oil price,” said Charles Stanley analyst Douglas McNeill.

Prior to yesterday’s announcement, analysts on average expected the airline to report a full-year pretax profit of £294.4m. EasyJet’s strong performance bucks tough conditions elsewhere in the airline sector

European carriers, including Air France-KLM and Lufthansa, have seen recent results hit by a toxic mix of high fuel costs, weak consumer confidence and the eurozone crisis.

Since the start of the year airlines including loss-making Spanair and Hungarian flag-carrier Malev have ceased operations, leaving gaps in the market that low-cost competitors have been quick to exploit.

EasyJet said strict allocation of capital and aircraft across its network, improvements in revenue management and a tight control of costs had helped it absorb an additional £230m in fuel costs this year.