Easyjet’s pre-tax profits fell 45% in the year to September 30, despite a 17.3% rise in passengers.

The airline blamed higher fuel costs for the fall in profits to £110 million.

Its annual accounts were released today but were not approved by founder Stelios Haji-Iannou (see today's separate story to find out why).

In its accounts summary, the airline said forward bookings for the first quarter of the financial year are currently slightly ahead of the previous year, despite a “very difficult and highly uncertain economic outlook”.

To counteract fuel costs it has reduced its aircraft utilisation for this winter from 11.6 hours to an average of nine hours a day.

“Winter capacity, measured in seats flown, will be broadly flat with last year but we expect competitor capacity on easyJet routes to fall by 7% in the same period,” it said.

“The impact of higher fuel costs will be felt most sharply in the first half of 2009 and thus pre-tax margins will decline in the first half compared to the prior year.”

For summer, Easyjet said yields will depend on the extent of the fall in consumer expenditure in Europe and the level of competitor capacity reduction in the market.

“We expect to see further downsizing and consolidation of many weak competitors,” it said.

Easyjet said it will look to cut costs through negotiations with suppliers, reductions in overheads and improved crew efficiency.

“For the full year at current fuel and exchange rates easyJet expects to be profitable,” it added.

Last week the airline’s founder Stelios Haji-Ioannou raised his stake in the firm to 26.9% and said it would reduce orders for new aircraft.

Chief executive Andy Harrison said: “ We recognise that economic conditions will be very difficult and easyJet is planning
accordingly, which means focusing on offering customers great value, driving down controllable costs and preserving cash.

“Unlike many of our competitors, our Airbus contract provides us with a flexible approach to fleet growth, which we intend to make full use of in such uncertain economic conditions. “

See separate story 'Boardroom row at Easyjet'



By Bev Fearis