British-based budget airline EasyJet has raised its guidance on full-year profit and has announced a special dividend for shareholders after more corporate passengers flew with the carrier in the second half.
The airline said that pre-tax profit for the year ending September 30 is expected to be between £240-250m sterling, up from previous guidance of £200-230m.
EasyJet says it plans a special dividend of 35 pence per share, or a total of £150m. That will bring dividends for the full year to 44 pence per share.
"Our performance continues to be robust, with particular strength on city routes used by business and short break leisure travellers," easyJet's chief executive Carolyn McCall said.
Analysts have said that the low cost carriers are likely to perform relatively robustly compared with the network carriers in tough trading conditions. German airline Lufthansa warned earlier this week of disappointing booking trends and said it no longer expected to improve on last year's operating profit.
EasyJet, based in Luton, said it would pay a dividend of 9 pence per share for the year and had decided to return a further 35 pence per share by way of a special dividend in light of the carrier's strong recent performance.
The move could appease easyJet's largest shareholder and founder, Stelios Haji-Ioannou, who earlier this year said he wanted to force a shareholder vote over the airline's plans to buy new aircraft from Airbus. McCall said Easyjet was obliged to call an extraordinary general meeting after Stelios' request and would do so soon.
The budget carrier, which acted last year to lure more corporate passengers, said revenue per seat rose 6% in the second half of the year - at the upper end of its expectations - and that it had already sold around a third of the seats for the first quarter of its next fiscal year.
EasyJet said the June launch of Flexi Fare - a service which allows passengers to change the date of their flight up to two hours before the scheduled departure time - had proved popular with corporate travellers. It added that it had increased frequencies to cities popular with business passengers, which also helped.
However, the company added that at current fuel and exchange rates its 2012 fuel bill would likely increase by about £220m compared to the prior year. Fuel cost rises tend to weigh more on price-sensitive flights used by tourists and individual travellers.
Despite a recent rebound in economy class travel, rising fuel prices continue to cause trouble for the industry and will knock airline profits by around a third in 2012, hindering the industry's recovery, industry body IATA said this week. IATA, however, raised its 2011 estimate by 42% to $6.9 billion, citing stronger than expected growth in recent months.
