EasyJet plans to buy new planes and resume dividends after record profit

EasyJet is proposing to order new aircraft and resume dividend payments to shareholders after making a record profit this summer.

The airline said it expects its profit before tax between July and September to be between £650 million and £670 million.

This was driven by an 8% increase in passenger numbers and a 9% rise in fares, both compared with the same period last year.

EasyJet said its profit before tax for the year to the end of September is expected to be between £440 million and £460 million.

The company is proposing to resume paying dividends to shareholders early next year at a rate of 10% of annual profit after tax.

This is expected to rise to 20% for the following year.

EasyJet has placed firm orders with Airbus for 157 new aircraft, which is subject to the approval of the airline’s shareholders.

Chief executive Johan Lundgren said: “We have delivered a record summer with strong demand for easyJet’s flights and holidays with customers choosing us for our network, value and service.

“This performance has demonstrated that our strategy is achieving results and so today we have set out an ambitious road map to serve more customers and deliver attractive shareholder returns, underpinned by a continued focus on costs and operational excellence.

“Our new medium-term targets provide the building blocks to deliver a PBT (profit before tax) greater than £1 billion.

“This will be driven by reducing winter losses, upgauging our fleet and growing easyJet Holidays.”

Mr Lundgren said the aircraft order will provide “substantial benefits including cost efficiencies and sustainability improvements”.

Asked if he has had discussions about the proposal with Sir Stelios Haji-Ioannou, whose family is the airline’s biggest shareholder, Mr Lundgren replied that talks have been ongoing with “all the stakeholders and all the shareholders”.

He added: “I don’t think that this is a surprise to anybody. This represents a great opportunity.”

A shareholder vote will take place later this year.

Sir Stelios declined to comment when approached by the PA news agency.

Mr Lundgren said the airline is experiencing “good demand” for this winter compared with a year ago.

He expects capacity between October and December to be 15% higher than the same period in 2022.

He added: “In situations like this with the cost-of-living squeeze, people gravitate more than ever towards value and brands that they trust.

“That will work very well for easyJet. We continue to see demand is strong going forward.”