EasyJet Shares Rise on Record Profits and Growth in Holidays Segment

Highlights of EasyJet's Fiscal Year 2024 Performance

1. Strong Profit Growth

• Headline profit before tax surged 34% to £610 million from £455 million in FY 2023.
• Record second-half profits of £960 million underscored robust demand.

2. Passenger and Holidays Growth

• Passenger numbers grew 8% year-over-year, reaching 89.7 million, driven by new routes and expanded networks.
• EasyJet Holidays posted a 56% rise in profits to £190 million, with customer numbers up 36%.

3. Improved Winter Losses

• Winter losses reduced by £40 million due to operational efficiencies like better aircraft utilization and an expanded holiday portfolio.

4. Cost Management Amid Inflation

• Despite industry-wide inflationary challenges, EasyJet kept cost increases minimal, with cost per seat (excluding fuel) rising only marginally.

Outlook for 2025

Increased Capacity and Optimized Operations

• Seat capacity to rise by 3% in fiscal year 2025.
• Further reduction in winter losses expected, with a strong start projected for Q1.

Investment Considerations

RBC Capital Markets highlights EasyJet's attractions, especially in its Holidays division. However, some competitors may offer higher margins or trade at more attractive valuations.

Financial Tools to Explore

• Assess EasyJet's valuation using the Advanced DCF.
• Monitor EasyJet's sector positioning via Sector P/E Ratio.