easyJet shares slipped on Tuesday after reporting a 9% increase in pre-tax profit to £665 million for the year ending 30 September 2025, representing its third consecutive year of earnings growth.
Guidance, however, wasn’t as encouraging amid rising costs amid strategic improvements to easyJet’s network.
The budget airline’s headline earnings before interest and tax jumped 18% to £703 million, driven by strength in both its airline and holidays divisions.
EasyJet shares were down 2% at the time of writing.
Investors might have hoped for a bit of a pop higher given the stock’s poor performance over the summer months, but it appears profits just weren’t strong enough to spark a major reaction.
“The outlook for the new year brought some mixed news,” said Aarin Chiekrie, equity analyst, Hargreaves Lansdown.
“Winter losses are set to get worse, coming in around £30 million behind market expectations, as ongoing investment in its new strategic bases in Milan and Rome continues. Looking past this, management’s hoping to grow capacity by around 7% this year, or nearly double the sector average, and first-half bookings are already tracking ahead of the prior year. With a net cash pile of over £0.6 billion, there’s also plenty of cushion if the market experiences some turbulence.”
The airline business contributed £415 million in pre-tax profit, whilst easyJet holidays achieved £250 million. This target has been achieved ahead of schedule.
Following the uptick in activity, the company has upgraded its holiday division target to £450 million pre-tax profit by 2030. The airline expanded capacity by 9% during the year, with seats up 4%.
“A 9% rise in pre-tax profit would be respectable for any carrier, but it will be EasyJet’s holiday division that turns investors’ heads,” explained Mark Crouch, market analyst for eToro.
“Slowly becoming the group’s profit engine, the package division delivered £250mn of PBT on 20% customer growth and 32% profit growth, so buoyant, in fact, that management has already upgraded medium-term targets it thought would take longer to hit.”
However, revenue per available seat kilometre fell 3% as the company invested in longer leisure and city routes whilst opening new bases at Milan Linate, Rome Fiumicino and London Southend.
Cost efficiency improved, with headline cost per available seat kilometre down 3%, helped by a 7% reduction in fuel costs.
In terms of the dividend, easyJet has outlines a payout worth 20% of headline profit after tax, payable in early 2026.