Easyjet annual profit falls 45%

Budget airline Easyjet has seen its annual profits fall because of higher fuel costs, despite carrying 17.3% more passengers over the year.

Pre-tax profits in the year to 30 September fell 45% to £110m ($165m).

The firm said future economic conditions would be "difficult" and it would concentrate on offering passenger value, cutting costs, and saving cash.

Airline founder Sir Stelios Haji-Ioannou, at loggerheads with directors, refused to back the company's accounts.

Shares in Easyjet were down 10% at the close in London, at 251 pence.

'At odds'

Last week Sir Stelios raised his stake in the firm to 26.9%, and called for a more-cautious outlook. His business proposal also included proposals for reducing orders for new planes.

Sir Stelios is also said to want to make future dividend payments in conjunction with a cessation of slowing of growth.

Following the financial results, he said accounting policies adopted by the board were "at odds with current commercial realities and the macro-economic environment".

He said the accounts could potentially overstate the value of Easyjet's landing slots at Gatwick Airport.

Sir Stelios is in discussions with the Easyjet board about his request to appoint two non-executive directors.

'Competitive capacity'

Andy Harrison, Easyjet chief executive said: "Easyjet delivered a good trading performance in the financial year ending September 2008."

He said winter bookings for the first quarter of 2009 were slightly ahead of last year, "partly a reflection of the reduction in competitive capacity on our routes and partly our own decision to restrict our growth in seats flown".

Mr Harrison also said there was evidence of a "flight to value" for both business and leisure passengers.

He also said Easyjet had a "flexible approach" to fleet growth, which it intended to "make full use of" in the present economic conditions.

Related link at BBC News