easyJet LON:EZJ enters its fourth decade with a problem most European airlines would envy: the burden of expectation. The low-cost carrier has posted a third consecutive year of earnings growth, with headline profit before tax rising 9 per cent to £665mn in the 12 months to September.
Yet the shares have drifted in recent years as investors debate whether the group can deliver on its upgraded medium-term ambition of more than £1bn in PBT.
The FY25 numbers give both sides ammunition. Headline EBIT rose 18 per cent to £703mn. The airline division contributed modestly, adding £50mn despite softer revenue metrics: available seat kilometres rose 9 per cent, but unit revenue slipped 3 per cent.
Cost discipline did the heavy lifting. Headline CASK improved 3 per cent, driven in part by a 7 per cent reduction in fuel CASK. For a sector still wrestling with payroll, airport and environmental levies, such gains are not trivial.
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eayJet holidays: the heavy lifting
The standout engine remains easyJet holidays. The package unit delivered £250mn PBT, achieving its medium-term target ahead of schedule and promptly upgrading it to £450mn by FY30. The business now accounts for more than a third of group profit. Customer satisfaction is high at 83 per cent, and the division plans up to 15 per cent customer growth in FY26. Its 18 per cent return on capital employed, two points better than last year, underlines the attraction of vertical integration for short-haul carriers.
Operationally, easyJet has rediscovered some of the reliability that deserted it in the post-pandemic years. On-time performance improved three percentage points to 72 per cent, while customer satisfaction hit a decade-high 80 per cent. These incremental gains matter for a model that depends on asset utilisation and tight turnrounds.
The balance sheet also looks airworthy. Net cash rose to £602mn, £421mn higher than last year, helped by free-cash-funded aircraft deliveries and opportunistic buybacks of leased jets. With £4.8bn of available liquidity and investment-grade ratings reaffirmed, easyJet has room to modernise and grow its fleet. The upgauging plan is substantial: 17 aircraft deliveries in FY26, 30 in FY27 and 43 in FY28. By FY28, owned assets are expected to exceed £7.5bn.
Any downsides for easyJet investors?
Execution risk lingers. Winter trading, a persistent drag on profitability, has not improved as quickly as hoped. New bases at Milan Linate and Rome Fiumicino, expanded by eight aircraft in summer 2025, required a £20mn investment and will incur a further £30mn this winter as the airline endures its inaugural cold-season operations there. Revenue maturity is emerging, but later than originally forecast.
Unit revenues remain under pressure. RASK fell 3 per cent for the year and just 1 per cent in the second half, suggesting some stabilisation. Forward bookings for Q1 FY26 are encouraging at 81 per cent sold, two points better year on year. But cost inflation will nibble: wages, maintenance and environmental charges continue to rise, even as fuel offers some relief. Management guides to “modest” headline CASK inflation next year.
easyJet’s dividend signals confidence
The dividend — £100mn, or 20 per cent of headline PAT — signals confidence. So does updated guidance: capacity growth of around 7 per cent in FY26, with longer average sector lengths, and holidays bookings already 80 per cent sold for the first half. CEO Kenton Jarvis insists the group is “well placed to seize the significant opportunities ahead” and reiterates the £1bn PBT target.
For investors, the equation is straightforward. easyJet’s strategy — upgauge, expand holidays, deepen capital discipline — is working, but not without friction. The carrier has returned to form; the question is whether it can stay aloft as costs rise and competition thickens. The medium-term runway looks long. The short-term weather, as ever in aviation, remains changeable.
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