easyJet Interim Results

easyJet plc, Europe`s largest low-cost airline, today announces interim results for the six months ended 31 March 2003.

easyJet reports record revenues of £373m for the first half, up 92% from the same period in the prior year. On a proforma basis, assuming a combined easyJet and Go Fly in 2002, the underlying revenue increase is 25%.

easyJet plc generated a loss before tax, goodwill and non-recurring items for the six month period of £24m which compares to a reported profit of £8.3m for the same period in the prior year. The loss after tax for the period was £46.9m, which compares to a reported profit of £0.8 million in the same period of the prior year.

In the first half net cash inflow from operating activities was £24m.

Highlights of the results (with comparisons on a pro forma basis, assuming a combined easyJet and Go Fly on 2002) include:

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* Passenger numbers up 40% to 9.3m
* Load factor up 1.1% pts to 82.2%
* Average fare £37.45, 10.7% lower than last year
* Revenue up 25% to £373m
* Aggressive cost control reduced cost per ASK by 8% (before tax, goodwill
and non-recurring items and tax)
* Loss before tax, goodwill and non-recurring items £24m
* Loss after tax of £46.9m
* Strong cash generation - net cash inflow from operating activities £24m
* £346m cash on balance sheet
* Airbus deal for 120 A319 ratified by shareholders
* Integration of Go Fly ahead of schedule

easyJet Chief Executive, Ray Webster, said:

“Our excellent growth in the first half demonstrates the continued attractiveness to passengers of the easyJet low cost business model. In addition to an almost 40% increase in capacity we have increased load factors by 1.1% pts, although at some cost in yields. The impact of external events, such as the conflict in Iraq, has placed further pressure on yields, which were consequently down 10.7% over the period.

“The loss for the first half primarily results from the normal seasonality of the business. In the first half demand is traditionally weaker, we schedule most of our planned maintenance and we experience more weather-related delays. In this half-year we also lost most of the benefit of the Easter period, as it has fallen in the second half.

“We have made better-than-expected progress with the integration of Go Fly and are below budget in respect of the anticipated costs of the integration, which amounted to £5.6million in the half year. In addition, we are realising greater benefits than originally expected. On 17th March 2003 we terminated the option to acquire Deutsche BA, which has caused £9.2million of costs to be realised in the period.

“The continued expansion at Paris Orly, London Gatwick and East Midlands, and the development of Newcastle as a base demonstrates easyJet`s continuing strategy of concentrating on network density. easyJet will operate 105 routes between 38 destinations in 11 countries over the summer period, an increase of 21 routes compared to summer 2002.”

Commenting on the trading outlook, Ray Webster said:

“Our business model remains robust and it is clear, as we move towards the busy summer period, that passengers are still willing to travel within Europe and they are responsive to price. Since the end of the half-year, our April passenger volumes were up 34% and yields were down approximately 3% year on year. This month benefited from the Easter holiday and from pent-up demand from the period of hostilities in Iraq.”

“Forward bookings indicate that revenue per flight in May is tracking close to last year, whereas June appears weaker, although a much lower proportion of June`s seats have currently been booked. At this point in time it is too early to have visibility regarding the financial outcome for the full year, as the strength of fares over our crucial summer period is not likely to be clear for a couple of months. However, we expect to maintain high load factors, albeit with yields continuing to be under some pressure compared to last year, offset to an extent by the reduction in the rate of growth of capacity which occurs in the second half of the year.

“In summary, the trading environment is challenging, but the propensity for travel within Europe remains strong and the number of passengers flying with easyJet continues to grow.”

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