easyJet improves margin - seasonal first half loss significantly reduced

• Winter margin improved by 4 percentage points to -2.4% from -6.4%.
• Loss before tax, reflecting seasonality of business, down 58% to £17m from £40m.
• Total revenue grew by 14% to £719 million.
• Return on equity for the rolling twelve month period increased to 11.9%, up over 6 percentage points from 5.6% in March 2006.
• Full year guidance maintained: pre-tax profit for the year to September 2007 expected to be 40% to 50% higher than record profits in 2006.
• Passenger numbers up 11% to 16.4 million.
• Unit passenger revenues increased by 0.8% or £0.26 per seat to £31.70 per seat.
• Ancillary revenues improved by 18% or £0.58 per seat to £3.81 per seat with partner revenues from insurance and car hire driving the growth.
• Unit costs excluding fuel reduced by 2.1% or £0.57 per seat from £27.75 to £27.18.
• 16 new routes launched. Network now covers 292 routes and 75 airports in 20 countries.
• Madrid base launched with 4 new Airbus A319s in February 2007. 9 new routes launched doubling the number of routes serving Madrid to 18 including Spanish domestic routes and routes to the UK, France, Italy, Switzerland, Germany and Morocco.
• easyJet’s fleet reinforced as one of the most modern and environmentally friendly fleets in Europe. Average age of fleet only 2.3 years following delivery of 10 new Airbus A319s during the period.

Commenting on the results, Andy Harrison, easyJet Chief Executive said:

"The first half of our financial year has seen growth in all areas. Our winning combination of low cost with care and convenience on a network now covering 75 airports in 20 countries on nearly 300 routes continues to attract new customers. In the six months to March 2007, we flew over 16 million passengers, up 11%.

“Our interim results show continued improvements with our margin rising by 4.0 percentage points from minus 6.4% to minus 2.4%. We have grown our total revenue per seat by 84 pence per seat and reduced our costs excluding fuel by 57 pence per seat, allowing us to more than halve our seasonal loss from £40m to £17m.

“We continue to introduce new Airbus aircraft into our fleet, thereby maintaining one of Europe’s cleanest and greenest aircraft fleets, and in April we collected our 100th Airbus A319. Through our investment in modern fuel efficient aircraft we have reduced our emissions of CO2 per passenger kilometre by 18% since 2000.

“Looking forward, our growth measured in available seats will accelerate during the summer months leading to approximately 15% growth for the full year to September 2007. As we stated last winter, we continue to see pressure on yields in the summer against high comparatives from last year and due to continued competition. Low fares underpin our growth and in the second half we have reduced many of our lead-in fares and increased our promotional activity to sustain high load factors in weaker market conditions. Our low fares are supported by maintaining focus on ancillary revenues and our cost base. We anticipate further progress on unit cost reductions, excluding fuel, in the second half and for the full year we anticipate unit fuel costs to be slightly down year on year. Our guidance remains unchanged, for the full year to September 2007 we expect pre-tax profit growth of 40% to 50%.”