easyJet FY15 profit up to £686m, orders 36 more A320s

easyJet has announced its financial results for the 12 months ended 30 September 2015 (FY15), with profit before tax growing 18% year-over-year to £686 million and the carrier maintaining it holds an estimated 8% of the European short-haul market.Total revenue for FY15 was £4,686 million, a 3.5% increase in comparison to FY14, with revenue per seat growing by 1.5% on a constant currency basis to £64.28. The carrier’s pre-tax profit margin increased by 1.8 percentage points to 14.6% across the respective periods.The airline carried 6% more passengers, with numbers increasing from 64.8 million to 68.6 million in FY15. Available seat kilometres grew by 5.4% whilst revenue passenger kilometres rose by 6.4%, resulting in a 0.9 percentage point increase in load factor to 91.5%. easyJet reached a record load factor in August of 94.4%, with load factors in both July and August driving revenue per seat up by 3.2% at constant currency in the fourth quarter.There has been a particular increase in business customers, with a 58% increase in the sale of flexible business fares compared with 2014. Sales through global distribution systems (GDSs) grew by 32% in the year as easyJet continued to build on its relationships with travel management companies and bookings from corporate customers direct also went up by 30%.However, while easyJet delivered £46 million of sustainable savings during FY15, cost per seat at constant currency excluding fuel increased by 3.6% due to cost pressures including regulated airport price increases, increased de-icing costs and significant disruption costs due to French ATC strikes in April and the impact of two fires at Rome Fiumicino airport.easyJet’s total fleet at 30 September 2015 comprised 241 aircraft, a net increase of 15 from 30 September 2014. The airline took delivery of 20 A320 aircraft in the past 12 months, which provide a per seat cost saving of 7% to 8% over the A319, five of which were retired during the same period. The average age of the fleet has now increased from 5.8 years in 2014 to 6.2 years. Overall, return on capital employed (ROCE) during FY15 increased to 22.2%, another record for the company.The carrier generated £895 million in operating cash, before investing £532 million principally in the acquisition of 20 aircraft. Therefore, easyJet ended the year with £435 million in net cash, which was marginally below the bottom end of the board’s target range.Moving forward, the carrier has placed an order with Airbus for an additional 36 A320 aircraft (30 A320neos and six A320ceos) between 2018 and 2021, all in the 186-seat configuration. The new order takes easyJet’s cumulative order for the type to 451, comprising 321 A320ceo family and 130 A320neo family aircraft.For the year to 30 September 2016, easyJet plans to increase capacity by approximately 7%, expanding its new bases in Hamburg, Amsterdam and Oporto as well as consolidating its market positions in the UK, Switzerland, France and Italy. It has hedged forward, on a rolling basis, between 65% and 85% of the next 12 months anticipated fuel and currency requirements.Based on current market fuel prices, easyJet expects the unit fuel bill to decline by between £140 million and £160 million during the year to 30 September 2016. As a result of passengers benefitting from this, the carrier also predicts a slight decline in revenue per seat at constant currency during the first half of FY16.“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 upgauging, resulting in positive profit momentum,” commented Carolyn McCall, easyJet’s CEO. “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.”

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