The recession has claimed many casualties in the business world, and EasyJet is the latest company to report its effects. The budget airline has seen a huge lose in its annual profits up to the month of September, the majority of which is being blamed on the rising price of fuel. This is a direct contrast to rival airline Ryanair, which recently reported an increase in profit over the past six months.
The pre-tax profits for EasyJet came to £54.7m, which is almost half of previous years £110.02m profits. This fall in profit was despite an increase in sales of 13%. Total passenger numbers also rose by nearly 4% up to 45.2m people.
A city insider commented on the report: “To see the words ‘airline’ and ‘profits’ in the same sentence is something of a rarity in the current environment, but EasyJet continues to capitalise on its no-frills offering. Perhaps most importantly, the guidance for 2010 after a tough winter this year was extremely upbeat and will give bulls of the stock market further reason for cheer.”
EasyJets chief executive, Andy Harrison, said the reasons behind the fall in profit were down to the high cost of fuel. With the price of oil exceptionally high, the subsequent costs have eaten into overall company profit. The airline is expected to increase it profits again next year to over £100m.