Budget airline easyJet has revealed it swung to an annual profit after a record summer, but cautioned over a hit from the conflict in Gaza.
The group reported pre-tax profits of £432 million for the year to September 30, against losses of £208 million the previous year, seeing the group announce its first dividend payout to shareholders since the pandemic.
Underlying, or headline, profits stood at £455 million against a £178 million loss in 2021-22.
A record-breaking performance over its second half and the peak summer season helped it shrug off a 30% jump in its costs, with its fuel bill soaring by 59% to £2 billion over the year.
It cautioned it does not expect to narrow losses in the first quarter of its new financial year as flights and wider demand are impacted by the war between Hamas and Israel.
Its flights to Israel and Jordan are temporarily paused, with Egypt also seeing a knock-on effect – altogether representing a combined 4% 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.
“Accordingly, despite positive underlying strength, easyJet does not currently expect its first quarter loss to improve year on year.”
Despite the woes in the Middle East, easyJet said the outlook for the new year as a whole was “positive” thanks to strong bookings for next summer and supply constraints in Europe.
The group resumed its dividends with a 4.5p a share payout due in early 2024 and confirmed it expects to increase this to 20% of profit after tax.