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EasyJet soars to new heights
LONDON, England (CNN) -- EasyJet, Europe's biggest budget airline, has seen its full-year profit soar as passengers flock to its low fares. Net income rose almost 30 percent to £49 million in the year ended September 2002, from £38 million a year ago, the company said on Tuesday. Sales rose 55 percent to £552 million. The airline (EZJ), which has said it expects to grow at about 25 percent a year, also benefited from the £374 million ($525 million) acquisition of rival Go-Fly. Passenger numbers climbed 60 percent to 11.4 million, but average net fares fell four percent to £46 as competition in the budget sector hotted up.
In contrast, rival traditional carriers like British Airways (BAY) and Lufthansa (FLHA) have seen passenger numbers decline on European routes. They have now begun to take on the budget airlines with lower ticket prices but with the benefits of full service airlines such as reserved seats and meals. EasyJet, which is run out of a bright orange corrugated iron shed near Luton Airport, north of London, was forced to cancel summer flights raising concerns it was struggling to meet demand and integrate Go. It announced in September it plans to buy 240 passenger jets from Airbus to meet demand and expansion. EasyJet Chief Executive Ray Webster said in a statement on Tuesday the integration of Go "is proceeding faster than expected.''
But the company's stock, which has outperformed British Airways by 17 percent since the start of the year, fell 2.6 percent to 388 pence in early Monday trade. EasyJet's shares have lagged rival Ryanair (RYA) by 23 percent this year, according to Reuters. Pretax profit came in at £71.6 million, easily beating analysts' expectations ranging from £57 to £66 million. EasyJet's founder Stelios Haji-Ioannou, who owns about 59 percent of the business set up the company in 1995 with just two aeroplanes. He is stepping down as chairman and director on Tuesday to focus on his other budget ventures, which include easyCar, easyInternetCafe and easyCinema, and is being replaced as chairman by his deputy, Colin Chandler.
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