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EasyJet to pay first dividend since Covid after record summer

A passenger aircraft operated by EasyJet Plc on the tarmac
A passenger aircraft operated by EasyJet Plc on the tarmac

EasyJet has reinstated its dividend for the first time since the pandemic after a record summer helped the airline return to profit.

The low-cost carrier will hand shareholders £34m after annual pre-tax profits hit £455m, following a loss of £178m in 2022.

A surge in sales from add-on charges, such as baggage and seat bookings, fuelled the increase, as the airline’s so-called ancillary revenue per seat rose 21pc to £23.47, up from £19.43 in 2022.

Its holiday division also grew 221pc, delivering pre-tax profits of £122m after securing 82.8m passengers during the year, an annual increase of 19pc.

However, the airline warned that its next batch of half-year results will be impacted by the conflict in the Middle East after it paused flights to Israel and Jordan.

Chief executive Johan Lundgren said: “Our record summer performance demonstrates the success of our strategy and that demand for easyJet remains strong as customers choose us for our network and value.

“We see a positive outlook for this year with airline and holidays bookings both ahead year on year and recent consumer research highlights that around three-quarters of Britons plan to spend more on their holidays versus last year with travel continuing to be the top priority for household discretionary spending.

“We are confident about the future and the opportunity ahead, focusing on capital discipline and driving our low-cost model to achieve our ambitious medium-term targets.”

A record-breaking performance over its second half and the peak summer season helped easyJet shrug off a soaring fuel bill and higher costs across the business.

It cautioned that it does not expect to narrow losses in its first quarter of the new financial year as flights and demand are impacted by the conflict between Hamas and Israel.

Its flights to Israel and Jordan are temporarily paused, with Egypt also seeing a knock-on effect. This represents a combined 4pc of its overall flight programme.

EasyJet said: “Additionally, there was a broader impact on near-term flight searches and bookings across the industry, though this seems to be coming back with a recent improvement in trading.”

However, the carrier remains optimistic and it recently revealed plans to order up to 257 new aircraft to help meet growing demand.