Easyjet profits fall as it bids to become the world’s first “zero carbon” airline

EasyJet reported a fall in profits today, after a “difficult” year, but is hoping to become the first “zero carbon” airline by offsetting its carbon emissions at a cost of £25m a year.

Easyjet Airbus A20-200 © PASCAL PAVANI/AFP via Getty Images

Easyjet profits fell 26% in the year to 30 September

Easyjet Airbus A20-200 © PASCAL PAVANI/AFP via Getty Images

EasyJet reported a fall in profits today, after a "difficult 2year driven by higher fuel costs, Brexit uncertainty and weakness in consumer confidence. Profit was still towards the top end of expectations, however.

Pre-tax profit fell 26% to £427m in the year to 30 September, down from £578 the previous year. Revenue rose by 8.3% to £6.385m and passenger numbers increased too by 8.6% in the 12 months to 30 September to 96.1 million but revenue per seat fell to just £60.81. With cost per seat including fuel at £56.74, the airline makes a just £4.07 per seat before tax. Dividend per share fell to 43.9p, down from 58.6p in 2018.

In a bid to head off the rise of "flight shaming" slowly creeping cross Europe, Easyjet said it will become the world's first "zero carbon" airline. Offsetting carbon emissions will cost £25m in the next year. Chief executive Johna Lundgren says this is just an "interim measure", with the company "supporting the development of new technology including electric planes to reinvent aviation".

Easyjet is hoping to capitalise on the demise of tour operator Thomas Cook earlier this year by launching its own package holiday business offering"more than 100

amazing beach and city holiday destinations", which it says will be up and running before Christmas, with booking available for winter 2019 and summer 2020. Around 20 million people take flights with EasyJet every year, it says, but just half a million book accommodation with them.

It is not worried by Brexit, it says, despite admitting that uncertainty surrounding leaving the EU has contributed to its fall in profits. It boasts that it is in "a state of full preparedness for all possible Brexit outcomes", with air operators certificates in the UK, Switzerland and Austria, and 50% of its equity held by EU nationals.

Easyjet shareholders seem to be happy with the result.s The share price was up by almost 4% in today's early trading.

Recommended

How to boost your income as dividends come back in fashion
Income investing

How to boost your income as dividends come back in fashion

Dividends are back in fashion. But how do you go about building an income-generating portfolio?
4 Jul 2022
Ray Dalio’s shrewd $10bn bet on the collapse of European stocks
European stockmarkets

Ray Dalio’s shrewd $10bn bet on the collapse of European stocks

Ray Dalio’s Bridgewater hedge fund is putting its money on a collapse in European stocks. It’s likely to pay off, says Matthew Lynn.
3 Jul 2022
Persimmon yields 12.3%, but can you trust the company to deliver?
Share tips

Persimmon yields 12.3%, but can you trust the company to deliver?

With a dividend yield of 12.3%, Persimmon looks like a highly attractive prospect for income investors. But that sort of yield can also indicate compa…
1 Jul 2022
The MoneyWeek Podcast: nuggets of positivity in an extended bear market
Investment strategy

The MoneyWeek Podcast: nuggets of positivity in an extended bear market

Merryn and John talk about he need for higher wages and lower house prices, and why the fact that this is the least dramatic bear market they’ve ever …
1 Jul 2022

Most Popular

UK house prices are definitely cooling off – but are they heading for a fall?
House prices

UK house prices are definitely cooling off – but are they heading for a fall?

UK house prices hit a fresh high in June, but as interest rates start to rise, the market is cooling John Stepek assesses just how much of an effect h…
30 Jun 2022
How to invest in copper, the most important metal in the world
Industrial metals

How to invest in copper, the most important metal in the world

As the world looks to electrify and try to move away from fossil fuels, copper looks set to be the biggest beneficiary. But how can you invest? Rupert…
30 Jun 2022
Don’t try to time the bottom – start buying good companies now
Investment strategy

Don’t try to time the bottom – start buying good companies now

Markets are having a rough time, so you may be tempted to wait to try to call the bottom and pick up some bargains. But that would be a mistake, says …
1 Jul 2022