British budget airline EasyJet has reported a 9% rise in annual earnings after new routes, cost cuts and rising demand helped offset higher fuel costs.
EasyJet, Europe's second largest low-cost carrier, said it expected mid to high single-digit percentage profit growth in the current year as it cuts costs and increases revenues from non-ticket products.
'While we expect a slight reduction in total revenue per seat, ancillary revenues will improve with double digit percentage growth supported by a series of new initiatives,' chief executive Ray Webster, who retires next month, said in a statement.
EasyJet said pre-tax profits for the year to the end of September were £68m, compared with £62m a year earlier. The result was higher than analyst forecasts of £63m.
EasyJet's fuel costs per seat jumped 47% in the period after oil prices hit record highs but this was partly offset by rising passenger numbers, reduced non-fuel costs and a 17% rise in ancillary revenue per seat. Ancillary revenues are non-ticket sources of income such as in-flight food and drinks, hotels and car hire.
The airline withdrew earlier warnings of a fall in annual earnings in August after rising ticket prices and fuller planes helped ease worries about fuel costs. Larger rival Ryanair has also staved off record fuel bills with cost cuts, more passengers and higher ticket prices but also warned earlier this month it expected yields - or average fares - to fall in the winter.
FL Group, the owner of airline Icelandair, upped its stake in easyJet last month to 16.2%, raising speculation it may be planning a takeover. Webster retires in December and will be replaced by Andrew Harrison, the former head of UK motoring services firm RAC.
