Easyjet profits boosted by business travel

A decision by Easyjet to target business travellers and more affluent holidaymakers has seen the budget airline increase the average amount it charges for a seat on its aeroplanes, which has resulted in shares in the company increasing by 10 percent.

In terms of revenue, Easyjet is Europe’s second biggest provider of budget air travel. The increase in price per seat has seen the average cost of a seat on an Easyjet flight go up by almost 10 percent in the last year to £51.83, despite the foreboding economic climate and tightening of purse-strings by consumers.

The price increase meant that Easyjet’s total revenue went up by 16.7 percent in the last quarter of 2011 to £763 million. The news of the figures was happily received in the City, as shares in Easyjet increased 29.3 pence to 443.1 pence during early trading.

Carolyn McCall, EasyJet chief executive, explained the figures were a result of “firm control of costs, the strength of EasyJet’s network, tight capacity discipline and pricing actions taken in the second half of last financial year” despite the fact that the “economic environment remained weak”.

McCall continued: “The good performance in the quarter has meant we are cautiously confident in our outlook for the business.”

Passenger numbers increased by 8.1 percent in the final quarter to 12.9 million, with disruptions due to weather accounting for the lower numbers from the same period the previous year. The amount of seats occupied per flight increased by just less than 1 percent to 87.6 percent during this time too.

In ongoing attempts to improve the brand’s quality, the airline introduced flexible date fares last year in a bid to entice business travellers and distance the company from Ryanair, Easyjet’s biggest rival in budget air travel. As a result of this, the company said that business passenger numbers had increased by 200,000 from last year. This rise in numbers comes at a time when the business travel market is in decline.

Easyjet is also planning to introduce a seat reservation system to replace the current free-for-all system of open seating their flights currently boast.