EasyJet has shaken up the air travel business with a pledge to offset the carbon emissions from the fuel of all of its flights by planting trees and investing in green energy.
The budget airline said today it will invest in forestry, renewables and community-based projects to offset its carbon impact.
The firm highlighted that it is ‘only an interim measure’ while new technologies are being developed, including efforts to develop hybrid and electric planes.
EasyJet benefited from strikes at British Airways and Ryanair but profits still slumped by 26%
‘Regular fliers often fret about their carbon footprint so Easyjet’s move, at a significant but not unmanageable cost of £25m a year, could pay off, ‘ said Russ Mould, investment director at AJ bell.
‘Well, at least if it is seen as a genuine strategy and not just window dressing.’
Easyjet also confirmed plans to launch a new package holiday business before Christmas in a bid to capitalise on the collapse of holiday operator Thomas Cook, as it reported a 26 per cent slump in full-year profits.
The budget airline said it was impacted by ‘some weakness in consumer confidence’ in the past year, but added that forward bookings for the first half of the new financial year were ‘reassuring’.
Publishing its full-year results, Easyjet also pledged to offset carbon emissions on all of its flights – a move that will cost it around £25million next year – with the aim of becoming the first net-zero carbon airline.
Pre-tax profits for the year to the end of September came in at the top end of guidance at £427million, although this is still a 26 per cent decline compared to last year, in part due to an increase of fuel cost per seat of 8.4 per cent.
Revenues jumped by 8.3 per cent to £6.4billion on the back of increased capacity as Easyjet took over new airport slots that belonged to Thomas Cook.
Passenger revenues also grew by 6.9 per cent, in part helped by strikes at British Airways and Ryanair.
‘Turbulence in the airline industry has been a source of opportunity for Easyjet, which has been able to take over new take-off and landing slots that once belonged to Thomas Cook, contributing to an increase in revenues,’ said Arlene Ewing, an investment manager at Brewin Dolphin.
But revenues per seat declined 1.8 per cent to £60.81 as ‘economic uncertainty’ caused by Brexit took its toll – although the airline said this improved in the second half of the year.
Easyjet boss Johan Lundgren hopes to capitalise on the collapse of Thomas Cook with the launch of the new Easyjet Holidays business
Easyjet carried 96.1million passengers last year, an increase of 8.6 per cent compared to the previous year, but its load factor dipped to 91.5 per cent.
Richard Hunter at interactive investor said: ‘Easyjet has recognised some inevitable weakness in consumer confidence, given the hazy economic outlook delivered by Brexit uncertainty and now compounded by the imminent General Election.’
But he added: ‘Ultimately, but positively, the disappointment of the first half of the year’s trading was largely undone by the strength of the second half.’
Meanwhile, Easyjet said it will launch its new Easyjet Holidays before Christmas as families book winter skiing holidays and summer breaks.
The business will offer flexible breaks that can be booked at any time of the week coinciding with its flights, instead of the traditional model of offering one or two-week holidays with flights at fixed times.
‘We believe there is a gap in the market for a modern, relevant and flexible business for today’s consumer,’ said chief executive Johan Lundgren.