06 February 2009

Recession may force change to EasyJet fleet plans

EasyJet has promised a "cautious approach" to growth in the current recession.

The message came from chairmanSir Colin Chandler at the budget airline’s AGM.

Fleet planning decisions will be made "prudently", on the basis of the trading outlook, as updated on a monthly basis and general macro-economic conditions, he said.

"Naturally this fleet plan for 2010 of 185 aircraft and 2011 of 197 aircraft may change if the macro environment worsens in the next three to six months and given the lead time for building aircraft," said Sir Colin..

"In light of the current economic environment the Board will continue to adopt a cautious approach to growth and will focus on maintaining a strong balance sheet."

Sir Colin, who is stepping down after six years, described the European economy as being in "a challenging recession of an uncertain length and depth".

He added: "Many commentators are suggesting that this could be the worst economic conditions of a generation. The harsh effects of this are already being felt by many companies and industries."

However, EasyJet has started 2009 better than expected with forward bookings in line with the prior year, he reported.

Sir Colin said: "There is clear evidence of business travellers switching to EasyJet in search of better value and we are benefiting as leisure passengers switch from long haul destinations to holiday within the EasyJet network.

"Our average fares also benefited from a 9% increase in sector length and the thinning out of our winter schedule as more of our flights operated at peak times and we reduced capacity on some of our routes year on year.

"The higher average fares will offset to some degree the higher fuel price EasyJet has paid this winter as well as the increase in unit costs which arises from lower utilisation of aircraft."

by Phil Davies