The airline said its “medium-term” target was to achieve a pre-tax profit of £1 billion. Although it gave no specific date, easyJet told TTG medium-term was “generally three to five years”.
EasyJet expects 2023 full-year group headline profit before tax to be between £440 million and £460 million, meaning it is almost halfway to achieving its ambition, with easyJet holidays – its in-house tour operator – expected to make an increasingly significant contribution.
This compares with £17 million after tax in 2022 – yet further confirmation, if it were ever needed, of the industry’s rapid turnaround after Covid.
In another sign of its post-pandemic health, easyJet has said it will pay a 10% dividend to investors early next year. The carrier said: “The expectation is that this will rise to 20% of headline profits after tax in 2024, payable in early 2025.”
EasyJet can do this having in February repaid a €500 million bond debt taken out during the pandemic. It also repaid a big chunk of a £1.4 billion loan and refinanced the remainder.
On Thursday (12 October), announcing its full-year results for the year to 30 September, it also confirmed an order for new aircraft worth up to US $20 billion.
Julie Palmer, partner at Begbies Traynor, said: “Despite a turbulent summer that saw easyJet cancel nearly 2,000 flights, it’s a reassuring update from the low-cost carrier this morning.
“The record profits are bang in line with consensus and passenger numbers are up 8% after a huge and persistent rise in demand for flights post-pandemic. But it’s the medium-term targets that are particularly exciting.”
Palmer characterised easyJet’s outlook as “a significant upgrade to current expectations”.
’Flying high’
Ruth Griffin, leisure partner at law firm Gowling WLG, added the airline had made headway despite rising costs and conflict in Europe.
"The introduction of new cost control measures as well as additional routes by chief executive Johan Lundgren seems to be paying off with easyJet flying high currently as the airline continues to strengthen its margins and enhance its resilience to international affairs.”
However, she cautioned: “The ongoing conflict in Ukraine is still causing issues with some flight routes and the possibility of further air traffic control strikes in Europe on the horizon gives shareholders a reason to be tempered despite the positive performance.”
