EasyJet profit falls but rivals' collapse spells good news

EasyJet's annual profit fell as chief executive Carolyn McCall prepared to leave after seven years in charge but the budget carrier said it was benefiting from the collapse of rival airlines.

So-called headline pre-tax profit for the year to the end of September fell 17% to £408m, weighed down by a £101m impact from currency swings.

Headline profit, down from £494m a year earlier, was within EasyJet's guidance of £405-410m. Excluding currency movements headline profit, which strips out one-time items, was £509m.

McCall will leave easyJet on 30 November to run ITV, the UK broadcaster. In the past few years EasyJet has been affected by a series of terrorist attacks that have deterred people from flying, uncertainty caused by Britain's vote to leave the EU and turmoil in the wider airline industry.

EasyJet said the results demonstrated the resilience of its business model in an industry where competitors were struggling. It flew a record 80.2m passengers last year, up 9.7%, and occupancy per plane was a record 92.6%. Revenue rose 8.1% to £5bn.

The company said revenue trends in the first quarter of the new financial year were encouraging, mainly because of reduced capacity in the industry. Monarch Airlines, easyJet's UK rival, stopped flying in October after declaring itself bankrupt.

Alitalia and Air Berlin also declared themselves bankrupt in the past six months as rising fuel prices, competition for passengers and subdued demand took their toll.

McCall said: "EasyJet delivered a robust performance during a difficult year for the aviation industry. EasyJet's model is resilient and sustainable and we now have a huge amount of positive momentum which will enable the airline to continue to grow profitably."

EasyJet agreed to buy parts of Air Berlin in October, a deal that will cost about £100m in one-off expenses. Johan Lundgren, the former deputy chief executive of TUI Group, will take over from McCall on 1 December.

Total cost per seat will fall by about 2% this year though excluding changes in fuel prices and currencies that cost will rise by up to 1%