Returning passengers boost Easyjet

Low-cost airline easyJet hailed the impact of returning passengers attracted by its “warm, friendly service” as it reported a fourth year in a row of record pre-tax profits.

The 21.5 per cent increase to £581m for the year to September 30 was slightly ahead of the top end of the group’s expectations as it said it was winning the battle for the skies with both national flag carrier and budget rivals.

It comes after rival Ryanair’s more recent conversion to friendlier passenger service appeared to be paying off with profit expectations up.

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Chief executive Carolyn McCall said: “EasyJet has opened up clear blue sky between us and our competitors - both legacy and low cost.”

The airline said it had increased the proportion of bookings made by existing customers to 57 per cent, up from 50 per cent in 2010.

This meant that more than 37 million passengers were rebooking each year compared with 25 million four years ago, a 50 per cent increase, easyJet said. The figure for business customers was 62 per cent.

The group said customer loyalty helped it both grow revenue and keep a lid on costs because it was cheaper to retain existing fliers than find new ones. It has recently launched a frequent flyer scheme to reward the most regular passengers.

Ms McCall said: “More customers are trying us, liking us and coming back to us.

“This is testament to our winning formula of low prices and warm, friendly service, as well as our unrivalled network.

“Popular new initiatives like allocated seating meant many people tried us for the first time and we are absolutely focused on driving loyalty so they choose us flight after flight.”

Easyjet said it was trying to make travel easy and affordable with digital initiatives such as its app - which has now been downloaded by 10 million people - while the use of mobile boarding passes continued to grow.

The group bumped up shareholders’ dividend payout by more than a third in line with a new policy of distributing 40 per cent of profits to investors.

It said passenger numbers were up 6.6 per cent to 64.8 million for the year with revenue per seat was up 1.9 per cent on a constant currency basis to £63.31 and load factor - a measure of how full its planes are - up by 1.3 per cent to 90.6 per cent.

During the year it started flying from former Flybe slots at Gatwick and opened new bases in Hamburg and Naples while announcing plans to open bases at Amsterdam and Porto.

A strike by Air France pilots in September helped it boost revenues by £5 million.

The airline said capacity on its network by seats flown was expected to grow by five per cent over the coming full year. It said forward bookings for the first half of the new financial year were slightly ahead of the prior year.

Revenue per seat for the first half was expected to be “flat to very slightly up” as a result of the investment and growth in its network.

It also said lower fuel costs would see it save between £22m and £70m for the 2014/15 period, though exchange rates would have a £20m adverse impact on the bottom line.