Easyjet to report £600m profit as holiday arm boosts business

Easyjet is set to report more than half a billion in profit in its full-year results next Wednesday as it continues to cash in on strong demand for travel in the post-Covid era.

The orange-liveried carrier is expected to haul in £595m in pre-tax profit, up from £455m the year prior.

Analysts are forecasting capacity growth of eight per cent to 100m in the 12 months to September, and five per cent on a compound basis going forward.

Dividends are expected to come in at 12p a share, with a further increase to 14.8p in 2025.

The results come in a year in which the share price of Europe’s three largest budget airlines, Ryanair, Easyjet and Wizz Air, has largely underwhelmed. Shares in Easyjet are broadly level, up two per cent in 2024, despite record flight demand across the continent.

Ryanair sparked a sell-off in London-listed airline stocks over summer after it reported a drop in profit and warned over falling ticket fares.

Delivery delays at the world’s two largest planemakers, Airbus and Boeing, have also left airlines struggling to hit capacity targets.

However, the FTSE 350 firm has shown resistance to the external issues, in part due to the performance of its package holiday division, Easyjet holidays. That segment is expected to rake in more than £180m over the period, up from £122m, as it closes in on a medium-term target of £250m.

“Easyjet’s last set of results landed well with markets, who had become nervous after rival Ryanair issued a weak performance over the same period,” Aarin Chiekrie, an equity analyst at Hargreaves Lansdown, said.

“But Easyjet bucked the trend by selling a higher percentage of its available seats for the fourth quarter, despite increasing its capacity by 7 per cent. This was enough to reassure investors that the group remains on the right flight path to deliver another record-breaking summer,” he said.

“It’s unlikely to be the start of a fully-fledged price war between the low-cost carriers, but it’s something the market will be keeping a keen eye on. Recent industry data shows that air travel demand continues to soar higher, and investors are eager to hear what easyJet sees on the horizon in next week’s results,” Chiekrie added.

Wednesday’s results will be the last of Easyjet’s long-serving chief executive Johan Lundgren, who is due to step down in January. He will be replaced by the firm’s finance chief, Kenton Jarvis.