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Business travel on easyJet’s radar
Rob Gill. EASYJET IS to refocus on business travel and expand in mainland Europe over the next five years.
The airline’s chief executive Carolyn McCall said the no-frills carrier would be looking to increase sales from the corporate sector and to get higher profitability per seat. She revealed the strategy as easyJet posted a
pre-tax profit of £154m for the 12 months to the end of September – a 181.5% increase on last year’s profit of £54.7m, despite the £57m cost of the volcanic ash crisis. As the company unveiled its annual results, it also made a move to capture more business traffic with the launch of a flexible fare allowing passengers to change flights up to two hours before departure time. “About 18% of travellers are business
travellers,” said McCall. “We think we can get more yield from that 18%, as well as growing the volume of business travellers. “We are looking at growth of 3-5% in business travel over the next three to five years.”
But McCall
stressed that business travel plans were on top of the airline’s leisure strategy, which would con- tinue to be a “core focus”.
She added that the airline would look at
increasing services in France and Switzerland where the “penetration of no-frills carriers” was much lower than in the UK. “There are clear opportunities for easyJet to continue to grow profitably and to take a share of the European short-haul market,” McCall said. EasyJet has also announced that it will be
paying the first dividend in its 10 years as a public company – a move that has been long advocated by its founder and biggest shareholder Sir Stelios Haji-Ioannou. Sir Stelios said the payment to shareholders was “a good first step” but called for the dividend to be increased “over time”. He added: “I welcome the renewed focus on the business traveller, which should generate more consistent revenues.”
IPO could value Flybe at £200m
FLYBE COULD be set to announce a flotation on the London Stock Exchange. The regional airline is believed to have hired
advisors in the City to put together an initial public offering which could value the company at £200m. Flybe reported a profit of nearly £7m in September and made a pre-tax profit of £6.8m in the year to the end of March 2010. It has claimed to be one of only three airlines
to have made a profit throughout the recession. The company is poised for more European
expansion after signing a code-share agreement with Air France. It has ordered up to 140 Embraer E-Series
aircraft and has been in talks with Finnair about cooperation in Scandinavia and the Baltic region. Flybe is currently 69% owned by Jersey-based
14 19.11.2010 Flybe is also poised for further expansion over Europe
Rosedale Aviation Holdings. British Airways also has a 15% stake in the company, with Flybe’s employees owning the remaining 16%. Responding to suggestions of a flotation, a Flybe spokesman said: “We do not comment on rumour and speculation.”
McCall aims to grow business travel, but leisure is still “core”
But he again raised concerns about easyJet’s continued fleet expansion plans, which will see its number of aircraft rise from 196 to 220 by September 2013. EasyJet’s revenue for the last financial year was up 11.5% from £2.67bn to £2.97bn. Passenger numbers were up 7.8% to 48.8 mil- lion, while load factors averaged 87% – a rise of 1.5 percentage points on the previous year.
Kuoni profits rise despite ash cloud
KUONI GROUP made a profit of £20m for the first nine months of 2010, marking a £17.5m rise on last year, despite the volcanic ash cloud costing the Swiss-based company £9.7m. However, sales for the UK and Benelux region fell by £12m to £114m, mainly due to the pound’s decline against the Swiss franc, although cost savings helped the division increase pre-tax profit from £3.6m to £5.6m. Group chief executive Peter Rothwell said: “Sustainable cost reductions, the improved economic environment and higher margins have enabled us to report a further encouraging increase in our earnings.” He said profit would have been £51.5m without the ash cloud and restructuring costs.
020 7921 8011
rgill@ttglive.com
Rob Gill
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