easyJet Chairman backs positive results

Sir Colin Chandler, Chairman of easyJet plc, has applauded the companies positive reults at this years AGM.He commented: “In November 2005, we announced an improvement in profit before tax of 9% to £67.9m (restated under IFRS to £82.6m) for the year ended 30 September 2005. This achievement, in tough market conditions, resulted from increased capacity and unit revenues and impressive progress in reducing costs, apart from fuel.

“The same trends have continued into the first quarter of 2006. Unit revenue (total revenue per seat flown) rose by 1.8% compared to the same period last year, helped by double digit growth in ancillary revenue per seat, and continued successful growth especially from our young bases in Berlin, Dortmund and Basel. Unit costs excluding fuel fell by 5% in the period.  However, rising fuel prices caused total unit costs to rise by 3% in the quarter.

“Our full year guidance remains unchanged. In the current financial year we expect to deliver capacity growth, measured by available seats, of 15%. Our strong focus on controllable costs will continue and should result in a 3-5% reduction in cost per seat, before fuel. We anticipate a slight reduction in total revenue per seat for the year.  Lower unit passenger revenues are expected to be partly offset by ancillary revenues, which will improve with double digit percentage growth supported by a series of new initiatives. Overall, we plan to achieve mid to high single-digit percentage profit growth in the current financial year.

“For the first half of the year, we expect a 50% increase in unit fuel costs.  This price impact will result in an additional charge of roughly £55m. In addition, the timing of Easter, falling in April, will have a negative impact on our first half compared with last year. Our good performance on reducing costs and increasing ancillary revenues has partially mitigated the increase in fuel, and as a result we anticipate a pre-tax loss of approximately £45m for the first half of the year.  This result is in line with our full year guidance and compares to a pre-tax loss, reported under IFRS, of £22m for the first half of last year.

“My colleagues and I were delighted to welcome our new Chief Executive, Andy Harrison, who joined us on 1 December 2005 with an impressive record of success at RAC plc. Andy has already made his mark on the business and he and the management team are committed to achieving the return on equity target which was approved by shareholders in September 2005 as part of a Long Term Incentive Plan which aligns the interests of management and shareholders.  The continuing reduction in unit costs, excluding fuel, is evidence of this commitment to date and gives me confidence that shareholders will see an improvement in the company’s profitability over the years ahead.

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“easyJet continues to adhere to its proven business model providing high frequency, good quality services between convenient airports at low cost.  Our intention to continue to grow the business is evidenced in our recent decision to take 20 further A319s in 2008 and 2009 and in our ongoing network development through new destinations, routes and frequencies.”
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