easyJet plc

Well, hello, everybody, and welcome to EasyJet's full year presentation for the period ending 30th of September 2025. I'm joined today by my full management board on the front row here. So please feel free to ask them questions either after the event or in the Q&A session that we'll have. We also loaded a presentation first thing this morning onto the website. Hopefully you've had a chance to look at that presentation. But if you haven't, I will give you the key highlights of it now and then we'll go straight to Q&A so we have a good amount of time for your questions. So we're very pleased to announce our third consecutive year of earnings growth. From a PBT perspective, that was a 9% increase to £665 million. But actually from an operational performance before financing, so EBIT, we saw an 18% improvement with £56 million of that improvement at EBIT coming from holidays and £50 million of that improvement coming from the airline. On holidays, we had a very successful year for holidays. We were able to reach the 250 million pound medium term target that we set just two years ago. And we did that ahead of schedule. There was strong customer growth. We saw a 20% increase in packaged holiday customers. We also had a 32% increase in profit due to the very low fixed overhead base of that business. We were also really pleased with the proactive actions that we took when it came to resilience measures to set up for the busy summer. We knew air traffic control was a problem. We knew it would be a bigger problem over French airspace, which we're particularly exposed to. And therefore, we wanted to get in front of that and did a lot of measures to do that. And we're very pleased with the performance. We saw a 3% increase in on-time performance And even more pleasing, a 4% increase in customer satisfaction. And at 80%, that's the highest level that we have had in over a decade. So a very strong performance despite the problems that still existed over French airspace. Moving on to the balance sheet, our owned asset position has increased to $4.8 billion sterling now in terms of owned aircraft. And we expect that to increase to over $7.5 billion by full year 28 as we see the NEO aircraft family deliveries really ramp up. When it comes to net cash, we improved our net cash position to $602 million, and that really is important, along with the enhanced liquidity that we carry, because that will help pre-finance a lot of these aircraft orders that we're going to be getting over the next three years. I'd also like to highlight that our return on capital employed reached 18% from just 13% when we set the target. So now we're operating in the range that we were seeking to do as a high-teen return on capital. So that moved nicely for us. Following the success, we know that the up-gauge and journey is still in front of us. We started for the year 25 with 82 A319s and we finished with 82 A319s because we only had nine deliveries and we took those into growth. So we're now looking forward to those increased Airbus deliveries, 17 next year, 30 the year after, and 43 the year after that, so we can really start moving and upgaging the fleet and retiring the older, less fuel-efficient A319s. And we would expect about 60% of those to go over the next three years by fully 28, and that will deliver the majority of the £3 per seat benefit that we've been talking about. Following the success of EasyJet holidays, we've upgraded that target to 450 million sterling by full year 30. And Gary and his management team are going to be holding a seminar in their Luton head office in Capability Green on Friday, where they'll unpack how they're going to do that. But I'm sure you'll have a couple of questions anyway for Gary at the end of this presentation. As we look forward to winter, we have to admit that we're finding the reduction of winter loss is more challenging than we originally hoped. We put a lot of capacity and productivity into this winter, and that did yield cost benefits. Our unit costs came down. We saw aircraft productivity utilization increase 5%. We saw crew productivity increase 6%. But what we have to remember is when we put those new routes on and we put that capacity on, that is an investment that the airline is making. And that takes typically two to three years to mature, which is what it's probably going to take because it's a slightly lower demand position in the winter. The other factor, which is why it's a little slower than we anticipated... is the fact that there are still two wars happening in our network. That means that in the Middle East we haven't returned to Tel Aviv, we're no longer flying to Jordan, for instance, and many carriers have substantially reduced their capacity in those areas, which has put more capacity into the old favourites like the Canaries and mainland Spain, Malaga, Alicante, and therefore more competition. but we really expect that to mature as we go forward. We saw a maturing of our domestic routes after we increased capacity following the reduction in domestic APD in 2023. Margins suffered a little bit, but now we have a very well-performing domestics programme, and we're seeing some of that profitability return to the cities as well. But that cost of investment sits with the airline, obviously from holidays, They benefit from the increased winter sun destinations. They benefit from a better schedule into cities for city breaks and immediately start selling into that, immediately start making profit because of their cost plus business model. The airline, however, whilst we get the cost benefits up front, it takes a little longer to get the revenue maturity benefits. But we're confident they come through. And the other thing we're mindful of for the winter ahead is our investment in Lunate and Fiumicino. We're really happy to be able to get these slots in Lunate. They don't come up very often. They've only come about because of the acquisition of the Lufthansa Group of Itta. And we placed five aircraft there and three in Fiumicino, which is a popular destination for us. But we know that it'll take time for that to mature. We're having to fly the remedy routes that came along with that. And we know that the new routes will take time to mature. But we're very confident and expect Linarte to have the same profit characteristics as someone like Orly, which does very well in our network. But we'll take two to three years to mature to deliver that. So with all that in mind, we still remain very confident of our ability to deliver to the billion pound target. And now, you know, two years ago, we were making that statement from a 427 million profit base. Now we're making that statement from a 665 million profit base. If we step back and look over the last couple of years since we set the medium-term targets, this is a slide I naturally love. It shows the progress we've made on every front. When it comes to our product range, we've had 13% more routes, and that is attracting customers and allowing us to grow. More customers are choosing EasyJet Holidays as their package provider. Originally, that was mainly coming from the airline. Now, more and more are winning those customers from competitors, and you can see that in the competitor data. You can also see that in our growth of market share from 5% to 10%. And the focus on resilience measures really came through with almost more than I was hoping for, a real tangible benefit in terms of the customer satisfaction scores, and that's so important for the brand going forward. So all of these key measures will help strengthen the long-term success for EasyJet. So in summary, we're well positioned to capture the growth opportunities that lie in the years ahead. We're confident that if we execute well on our strategy alongside a continued discipline approach on capital allocation, that that will drive us towards the medium-term targets and then beyond. Our asset-light EasyJet holidays model is now going into a second phase of its development. We're looking to increase that UK beach market share from 10%. and challenge the number one and two in the market. We're starting to work much harder on the European expansion and we're seeing good early signs of that. The city proposition is coming through nicely. So Gary can talk about all the activities that underpin the confidence that we can increase our targets up to 450 million. And the NEOs are coming. We've seen a consistency from Airbus. The supply chain difficulties seem to be unblocking a bit. And we, you know, last year we said we're expecting nine aircraft in full year 25. We got them. And we said then it goes 17, 30, 43 aircraft. A year later, we're still saying 17, 30, 43. So Airbus haven't moved that schedule. So we're growing in confidence that that up gauging will come through. And we know from the aircraft that we have replaced so far that that is a £10 benefit when a 320neo replaces a 319 or a £16 per seat benefit when a 321 replaces a 319. And obviously, when you're making profit of £6.40 roughly, those are big numbers in terms of a reduction in the cost. for those aircraft we're flying. With all these levers and with one of the strongest balance sheet, investment grade balance sheets in the industry, I think we're well positioned to push forward. And we firmly believe as a management team, if we focus on this execution, then over the medium and long term, we will provide very attractive shareholder returns. So many opportunities in front, very excited about the future and the potential for EasyJet. And we'll go open to questions. Adrian.

Hi, it's James Hollins from BNP Paribas. I'll save any holidays questions till visiting Gary Wilson Towers on Friday. So three, if I may. First of all, on holidays via airlines, it is quite sort of noteworthy that airlines was, I think, flattish PBT, all the growth was coming from holidays. Maybe sort of run us through... kind of the airline-specific headwinds, and I think more importantly how that plays out as we look at for year 26 before the up gauge story kicks in for the airline. Secondly, Jan, on your little video there earlier, you clearly noticed some cost efficiencies targets or cost efficiencies program. Maybe run us through in a bit more detail how you're seeing a potential cost program, any quantification, timing, or am I just overstating it? And then thirdly, I think probably for you as well, Jan, is there any lease repurchase gains being incorporated into your full year 26 unit cost guidance? Thank you.

Okay, well, I'll take the first one and then Jan can take the second two. When it comes to profitability and airline versus holidays, as you put it, I think the first thing to say is we very much think of ourselves as a group. And it's a group target that we're all focused on pursuing. So we have a group target to deliver a billion pounds in profit for tax. We've seen good progression for the last two years. I should probably leave it on that slide, shouldn't I? There we go. We've seen good progression for the last two years, and we're confident we can keep progressing. Now, it's fair to say that the PBT development, which was an improvement of 55 million, was 60 airline and five negative for the, sorry, five negative for the airline and 60 for holidays. But when you look at it at an EBIT level, you can see a much more even spread. We increased our EBIT by £106 million. 56 was holidays, 50 the airline. And what you've got to remember is, as a group, the airline bears the cost of the expansion. When we establish a new route, it's the airline that will get the productivity benefits, but equally, it's the airline that will have to wait for the route maturity. EasyJet Holidays gets to sell straight into that additional capacity, especially if we've been putting it in regional UK, which we have. And when we look at the interest costs, which are the financing costs, which is the delta between the PBT development and the EBIT development, there's three main reasons there. Firstly, the three, three and a half billion of cash we're carrying, the interest rate environment is lowered, so we're getting less income on the monies we're carrying there. Secondly, we retired a half a billion pound bond during the year. That was taken out many years ago at very low interest rates, and the cash we had on deposit was earning greater interest rates than the bond that was servicing, but we retired that, so that had an impact. And the third reason is we anniversary the bond we took out in March 24 and therefore had the impact of that. But also any FX exchange rate on the balance sheet, I think that was a hit this year of 13, 14 million year on year, that goes through that financing line as well. So the actual underlying performance moved forward for both airlines and holidays. Also, I'd point out that the opportunities in front of us, Gary will talk you through the many opportunities he sees for holidays, but the upgaging is a great opportunity for the airline, because that will allow us to deliver, have a lower cost of production, which will sit in the airline, that benefit, as that comes through. Equally, the opportunity to fly back into the Middle East, which we're hoping to start up again in kind of... This summer, from certain destinations, it won't be anything like the volume it once was until that builds progressively over time. But that is a good destination in the winter. Jordan is a good destination in the winter. And not only will that be a profitable destination for us, but it will also take some of the pressure off the Canaries, which has been the alternate for so many destination choices, which are currently removed with two wars in the network right now. And hopefully, as French air traffic controllers get finally recruited, we'll see an improvement in that air traffic control space. We will maintain our investment in that space for as long as we need to. But then there should be some unwinding over time as we see a naturally improved performance. We haven't seen that yet. So we're going to keep the customer experience as high as we can until such a time comes. So I don't really see a big delta between the performance because underlying performance increased nicely for both. Yeah.