easyJet reports 18% jump in annual profit on robust demand

UK-based airline easyJet reported robust *demand for European flights and announced that it was ordering 36 more planes as part of its expansion plan following an 18 percent increase in annual profit.

Demand is a measurement of how much consumers want and are buying something. If demand for easyJet flight are high, sales are high, if demand is low, sales are sluggish.

Chief Executive Carolyn McCall pointed out that recent terrorist attacks will have impact on travel, but expects the sector to bounce back quickly.

McCall said that stricter airport security measures and concerns about air travel would understandably result in a “cooling off” among passengers.

When asked about travel to France McCall said: “You will always see a cooling off period but you also see quite a quick resumption to travelling again,”

The airline reported annual pre-tax profits of £686 million – up for the fifth consecutive year. The carrier attributed the better-than-expected performance to what it called “favourable economic and consumer trends”.

Revenue rose 3.5% to £4.68 billion, while passenger numbers climbed up 6% to 8.6 million in the year to end-September.

Return on capital employed rose to a record 22.2%, up of 1.7%.

Commenting on the results Carolyn McCall said:

“Our outlook for the longer term is positive. We expect demand in our markets to be sustained and for easyJet to continue to be a winner in its markets. We will see passenger growth of 7% a year, sustaining margins through rigorous cost control and the benefit of fleet up-gauging, resulting in positive profit momentum.

“We remain totally focused on our network advantage, digital leadership and offering our customers great low fares and service. We continue to invest in profitable growth, ensuring our digital advantage and giving our customer good value fares.”