EasyJet to resume dividend payments and order new aircraft after record profit

12 October 2023 , 10:45

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EasyJet is proposing to order new aircraft and resume dividend payments to shareholders after making a record profit this summer. (Image: 2023 PA Media, All Rights Reserved)

EasyJet is set to splash out on new planes and start paying dividends again after a record-breaking summer of profits. The airline has revealed that it expects its pre-tax profit for July to September to be between £650 million and £670 million, thanks to an 8% rise in passenger numbers and a 9% hike in fares compared to last year.

The company's pre-tax profit for the year ending in September is predicted to be between £440 million and £460 million. EasyJet plans to start giving dividends to shareholders early next year at a rate of 10% of the annual profit after tax, which is expected to increase to 20% the following year.

The airline has also placed firm orders with Airbus for 157 new aircraft, pending approval from its shareholders.

EasyJet's Chief Executive, Johan Lundgren, said: "We have delivered a record summer with strong demand for easyJet's flights and holidays with customers choosing us for our network, value and service." He added that their performance shows their strategy is working and they have set ambitious goals to serve more customers and provide attractive returns for shareholders, all while keeping a keen eye on costs and operational excellence.

He concluded by saying, "Our new medium-term targets provide the building blocks to deliver a PBT (profit before tax) greater than £1 billion."

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"This will be driven by reducing winter losses, upgauging our fleet and growing easyJet Holidays."

Mr Lundgren said the aircraft order will provide "substantial benefits including cost efficiencies and sustainability improvements".

Asked if he has had discussions about the proposal with Sir Stelios Haji-Ioannou, whose family is the airline's biggest shareholder, Mr Lundgren replied that talks have been ongoing with "all the stakeholders and all the shareholders".

He added: "I don't think that this is a surprise to anybody. This represents a great opportunity."

A shareholder vote will take place later this year.

Mr Lundgren said the airline is experiencing "good demand" for this winter compared with a year ago.

He expects capacity between October and December to be 15% higher than the same period in 2022.

He added: "In situations like this with the cost-of-living squeeze, people gravitate more than ever towards value and brands that they trust."

"That will work very well for easyJet. We continue to see demand is strong going forward."

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