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(Part 1) easyJet: Interim results for the six months ended 31 March 2002 - First-half Profits Revenues and Passenger Numbers both up by 36%

Kloten (ots)

easyJet plc, the fast growing low cost airline,  today announces
interim results for the six months ended 31 March 2002.
easyJet plc generated a profit before tax for the
six month period of £1.0m.  This is the first time in easyJet's
history that a profit has been reported for the first half which is
traditionally loss making, due to the seasonality of the business. 
This result is due to strong passenger demand, the timing of Easter
and few serious weather related disruptions.
Highlights of the half-year performance include:
- Revenues up 36% to £194m (2001: £143m)
   - First half profit before tax of £1.0m (2001: £10.3m loss)
   - Passenger numbers up 36% to 4.3m (2001: 3.2m)
   - Load factor up 3.6% points to 84.2% (2001: 80.6%)
   - Five new routes launched from Gatwick, where easyJet is now    
     second largest scheduled carrier, after the British Airways 
     group
   - Introduction of five new Boeing 737-700 aircraft
   - Successful equity issue raised £93.3m
Commenting on the results, Ray Webster, Chief Executive, said:
"These results reflect the continued success and robustness of the
easyJet business model.  We have been able to benefit from the major
changes in the European aviation industry.  In the last twelve months
8.3 million passengers flew with easyJet, with around 90% of
customers continuing to book through the internet.
"The introduction of five new routes from Gatwick linking existing
destinations demonstrates easyJet's continuing strategy of
concentrating on network density. Over the summer, easyJet will
serve 45 routes from 19 airports.
"The recently-launched services from London Gatwick are proving
popular with our customers.
"Since the half-year end, services have been launched from Paris
Charles de Gaulle to Liverpool and three further services from the
French capital are starting later in the second half.  Though demand
is anticipated to be strong, yields are expected to be immature and
advertising expenditure higher as the market is developed.
"My colleagues and I remain confident of achieving our
expectations for the full year."
CHAIRMAN'S STATEMENT
I am pleased to report to shareholders that easyJet's interim
results for the six months ended 31 March 2002 reflect the continued
success and robustness of the easyJet business model.
Buoyant trading, aided by a mild winter and the timing of Easter
has resulted in easyJet reporting a first-half profit before tax of
£1.0 million, compared to a loss of £10.3 million over the same
period last year.
The European aviation industry has been in a state of major change
over the last six months, accelerated by the events of 11 September,
with many traditional flag carriers announcing restructuring,
capacity reductions and staff redundancies.  At the same time the
low-cost product offering has been proving popular.  easyJet has been
taking advantage of the market opportunities which are emerging in
Europe and has the opportunity to replace the uneconomic and
inappropriate services offered by many flag carrier airlines.  As a
consequence, easyJet is accelerating its growth to capture these
opportunities and in the first half grew capacity by 36% compared to
the same period last year.
On 18 April 2002, a restructuring of the easyJet plc board was
announced.  As a part of this, I intend to resign as Chairman and as
a director of easyJet plc at the next Annual General Meeting (to be
held in 2003) to be replaced by Sir Colin Chandler who in the
meantime has joined the Board as Deputy Chairman.  Sir Colin's long
experience in the aerospace industry and track-record in running
major blue-chip public companies will be invaluable to easyJet as it
continues to grow.  As a result of these changes, the Chairman will
be independent from the major shareholder and the majority of
directors will be independent within the meaning of the Combined
Code.  These changes demonstrate easyJet's commitment to high
standards of corporate governance.
easyJet's success over the past six months is in a large part due
to our staff.  In a period of momentous industry change and stress,
they have provided the inspiration and resilience that makes easyJet
the success that it is.  I would like to thank them for all their
efforts.
Stelios Haji-Ioannou, Chairman, 7 May 2002
*********************************************************************
CHIEF EXECUTIVE'S REVIEW
Overview
easyJet plc generated a profit before tax of £1.0m for the six
months ended 31 March 2002.  This is the first time in the company's
history that a profit has been reported for the first half. 
Historically, easyJet's business is seasonal, with losses in the
first half of its financial year and profits in the second half. 
This result is due to strong passenger demand, the timing of Easter
and a mild European winter.
The repercussions of the events of 11 September, whilst occurring
in the final month of the last financial year, continue to affect
many parts of the world economy and the aviation industry in
particular. Although many of the traditional carriers have suffered
over the last six months, easyJet has been in a position to benefit
from the opportunities arising from this industry realignment.
easyJet's revenue increased 36 percent half-year on half-year, to
£193.9 million resulting from increased capacity and higher load
factors.  The number of passengers increased 36 percent half-year on
half-year to 4.3 million, driven by the introduction of new aircraft
and a 3.6 percentage point increase in average load factor, up to
84.2 percent.  The average fare decreased by 2.5 percent, half-year
on half-year.  In the current market environment, easyJet has sought
increased passenger volume to compensate for the softer yields in the
marketplace.
Aircraft
Over the first six months of the financial year, easyJet took
delivery of five additional new Boeing 737-700s.  These were
purchased from Boeing and then financed through operating leases.  In
addition, two aircraft, which had been scheduled to be returned to
lessors during the period, were retained on favourable commercial
terms.  Thus at 31 March 2002, the total fleet comprised 30 aircraft.
 Over the period, the fleet averaged 27.5 aircraft, an increase of 35
percent compared to the same period last year.  At the financial
year-end, it is anticipated that the fleet will consist of 36
aircraft.
In January 2002, easyJet announced that it was in discussions with
Boeing and Airbus concerning the possible acquisition of
approximately seventy-five new Boeing 737-700 or Airbus 319 aircraft
and that it was reviewing the benefits of potentially operating a
mixed fleet.  These discussions and reviews continue.
Routes
In February 2002, easyJet continued its expansion at London
Gatwick and commenced five new routes to Barcelona, Edinburgh,
Malaga, Mallorca Palma and Zurich.  easyJet will commence flying to
Athens from Gatwick from 1 July 2002.  easyJet will now operate up to
24 daily services from Gatwick and is the second largest scheduled
airline at the airport, after the British Airways group.
The introduction of these routes linking existing destinations
demonstrates easyJet's continuing concentration on network density
and allows us to improve marketing efficiencies and enhance services
in our key London market.  In the summer, easyJet will serve 19
airports and operates 45 routes.
easyJet has also obtained slots at Paris Charles de Gaulle and
Paris Orly airports and will begin four new routes from the French
capital in the summer.  easyJet will fly from Paris Orly to Geneva
and from Paris Charles de Gaulle to Luton, Liverpool and Nice.  From
mid-June, the airline will have four aircraft operating a total of
fifteen flights a day through Paris.
By launching services through Orly and Charles de Gaulle, easyJet
has the opportunity to serve the entire city, north and south, as we
currently do successfully in London through Luton and Gatwick.  I am
confident that we will be able to operate our low cost, high
utilisation model through both airports and hope to be able to fulfil
our ambition of making Paris one of easyJet's major European bases.
External factors affecting the first-half
The timing of Easter has had a major beneficial effect on the
reported outcome for the first half of the year, by drawing revenue
forward from later in the year.  Last year, Easter occurred in the
second half of the year, whereas this year it occurred in late March.
During the first half ended 31 March 2002, the average fuel price
fell 31 percent to 72 cents per US gallon, compared with an average
price of 104 cents for the half-year ended 31 March 2001.  This has
resulted in a £8.2 million saving in fuel cost for the first half of
this year compared with the prices experienced during the same period
last year.
Insurance costs rose dramatically after the events of 11 September
2001.  Half-year on half-year, easyJet's insurance costs rose by £5.9
million to £6.8 million.  During the period, easyJet introduced an
insurance surcharge of £1.60 per passenger per sector.  The impact of
increased insurance was more than offset by the benefit from lower
fuel prices over the period.  Discussions are ongoing between
airlines, governments and the insurance industry over long-term
solutions to the problems of aviation insurance.  In the short term,
the UK Government continues to provide the insurance market with a
reinsurance commitment for war and allied perils risks.  This cover
has recently been extended to 31 May 2002.  easyJet expects the full
year net insurance cost to remain substantially higher than last
year.
Europe's weather has been relatively mild during the first half of
this year and as a result easyJet experienced few serious weather
related disruptions over the period.  In contrast, in the six months
ended 31 March 2001, weather disruptions occurred in late December
2000.  Our experience is that weather related disruptions do occur
each year, however the timings vary considerably.  easyJet notes that
weather-related disruptions have occurred during the second half of
some previous financial years.
Cashflow
In November easyJet successfully raised net proceeds of £93.9
million by the issue of 26 million new shares.  This cash has
strengthened the balance sheet and has supported the acquisition and
financing of new aircraft.  As at 31 March 2002 easyJet had £381.9
million of cash and net funds of £300.6 million.  The Group continues
to generate strong cashflow from its operations.  Over the period net
cash inflow from operations was £45.2 million.  The Directors believe
that easyJet's strong balance sheet and cashflow, provides it the
flexibility to take advantage of growth opportunities as they emerge.
The Airline Group
easyJet is one of the seven shareholders in The Airline Group (TAG),
a consortium of airlines which owns a minority interest in the
company which operates the UK air traffic control system (NATS).  The
investment was made last year for strategic reasons in order to be
able to influence the direction of the development of air traffic
control services and the level of charges.
However given the long time period before an expected return would
be realised, the Board of easyJet has decided to be prudent and to
provide for in full its £7.2 million investment in TAG.
easyJet's future growth is critically dependent on the provision
of efficient air traffic control services and consequently easyJet
remains vitally interested in NATS and has no current intention to
sell its stake in, or to cease its involvement with, TAG.
Trading outlook
easyJet continues to see strong demand for low cost airline
services.
Paris services began on 2 May 2002 and will be extended during
the second half of the financial year and, while demand is
anticipated to be strong, the yields are expected to be immature.  In
addition, as Paris is the first new destination in almost three years
and the largest city since easyJet launched in London in 1995,
advertising expenditure is expected to be higher as the market is
developed.
The recently-launched routes from London Gatwick are proving
popular with our customers.
As demonstrated in the first six months, management maintains its
ongoing focus on cost control.
The aviation industry in Europe is undergoing major change.
Consumer demand is strong and growth opportunities are emerging for
easyJet to provide the services and prices that consumers want. 
However, Europe's politicians must have the strength to allow these
long-overdue changes to prevail so as to let the more efficient
airlines take advantage of these opportunities and to give Europe's
consumers what they want.
My colleagues and I remain confident of achieving our expectations
for the full year.
Ray Webster, Chief Executive, 7 May 2002
*********************************************************************
Post Balance Sheet Events
The following events have occurred since 31 March 2002:
  • in April 2002, the group took delivery of a new Boeing 737-700 aircraft, which will be financed by sale and leaseback;
  • easyJet has signed a letter of intent to dry lease an additional new Boeing 737-700 from June 2002;
  • easyJet has arranged committed lease financing for six scheduled Boeing 737-700 deliveries, including the delivery in April 2002;
  • on 3 May 2002, easyJet announced that it was at an advanced stage in exclusive negotiations with 3i Group plc and Go Fly Ltd, regarding the possible acquisition of Go Fly Ltd. easyJet's intention is to conclude these negotiations only if it believes that the acquisition would be in the interests of shareholders, customers and staff; and
  • easyJet has signed Heads of Terms with British Airways, under which easyJet has acquired the option to acquire 100% of Deutsche BA, subject to a number of conditions.
*********************************************************************
SELECTED CONSOLIDATED OPERATING DATA
(unaudited)
Period ended       Year-on-year
                                      31 March           change
2002       2001
Number of aircraft owned/leased
at end of period                            30        22         36 %
Average number of aircraft owned/
leased over the first six months          27.5      20.4         35 %
Number of routes operated at end
of period                                   40        29    11 routes
Number of airports served at end of         17        17           -
period
Passengers over the first six
months                               4,338,975 3,199,349         36 %
Load factor over the first six
months                                   84.2%     80.6%     3.6% pts
Internet sales percentage during
final month of financial period          90.9%     86.5%     4.4% pts
Definitions
Number of aircraft owned/leased at end of period
Represents the number of aircraft owned (including those held on
lease arrangements of more than one month's duration) at the end of
the relevant accounting period.
Passengers
Represents the number of earned seats flown by easyJet.  Earned
seats include seats that are flown whether or not the passenger turns
up, because easyJet is generally a no-refund airline and once a
flight has departed a no-show customer is generally not entitled to
change flights or seek a refund.  Earned seats also include seats
provided for promotional purposes and to easyJet staff for business
travel.
Load factor
Represents the number of passengers as a proportion of the number
of seats available for passengers.  No weighting of the load factor
is carried out to recognise the effect of varying flight (or "stage")
lengths.
Internet sales percentage
Represents the number of seats initially sold over the internet
divided by the total number of seats initially sold, during the final
month of the relevant financial period. Sales that are originally
made via the internet, but are later amended by phone, are included.
*********************************************************************
Independent review report to easyJet plc
1 Introduction
We have been instructed by the company to review the financial
information for the six months ended 31 March 2002 which comprises a
consolidated profit and loss account, balance sheet, cash flow
statement, statement of total recognised gains and losses and the
related notes.  We have read the other information contained in the
interim report and considered whether it contains any apparent
misstatements or material inconsistencies with the financial
information.
2 Directors' responsibilities
The interim report, including the financial information contained
therein, is the responsibility of, and has been approved by, the
directors. The directors are responsible for preparing the interim
report in accordance with the Listing Rules of the Financial Services
Authority which require that the accounting policies and presentation
applied to the interim figures should be consistent with those
applied in preparing the preceding annual accounts except where any
changes, and the reasons for them, are disclosed.
3 Review work performed
We conducted our review in accordance with guidance contained in
Bulletin 1999/4 issued by the Auditing Practices Board for use in the
United Kingdom. A review consists principally of making enquiries of
group management and applying analytical procedures to the financial
information and underlying financial data and based thereon,
assessing whether the accounting policies and presentation have been
consistently applied unless otherwise disclosed. A review excludes
audit procedures such as tests of controls and verification of
assets, liabilities and transactions. It is substantially less in
scope than an audit performed in accordance with United Kingdom
Auditing Standards and therefore provides a lower level of assurance
than an audit. Accordingly, we do not express an audit opinion on the
financial information.
4 Review conclusion
On the basis of our review we are not aware of any material
modifications that should be made to the financial information as
presented for the six months ended 31 March 2002.
KPMG Audit Plc
Chartered Accountants
London
EC4Y 8BB
7 May 2002
*********************************************************************
Consolidated profit and loss account
(for the 6 months ended 31 March)
Notes   Unaudited  Unaudited  Year ended
                                     Six months Six months 30 Sept.
                                     31/3/2002  31/3/2001  2001
£ 000      £ 000      £ 000
Revenue                      2         193,942    142,844    356,859
Cost of sales                         (161,170)  (124,939)  (265,648)
                                       _______    _______    _______
Gross profit                            32,772     17,905     91,211
Distribution and
marketing expenses                     (18,478)   (17,855)   (31,692)
Administrative expenses      4         (10,338)   (10,470)   (21,396)
                                       _______    _______    _______
Operating profit/(loss)
Operating profit/(loss)
before exceptional
administrative expenses                  3,956     (7,141)    41,900
Exceptional administrative 
expenses                                 -         (3,279)    (3,777)
Operating profit/(loss)                  3,956    (10,420)    38,123
Interest receivable                      5,565      4,341     10,205
Interest payable                        (1,349)    (4,207)    (8,195)
Amounts written off
investments                  5          (7,159)     -          -
                                       _______    _______    _______
Profit/(loss) on ordinary
activities before taxation               1,013    (10,286)    40,133
Tax on profit/(loss) on
ordinary activities          6            (235)    -          (2,226)
                                       _______    _______    _______
Retained profit/(loss)
for the period                             778    (10,286)    37,907
                                       =======     ======     ======
Earnings/(loss) per share:
Basic                        3            0.3p      (4.3p)     15.2p
Diluted                      3            0.3p      (4.3p)     14.4p
                                       =======     ======     ======
(continued on Part 2)

Contact:

easy jet plc
Tom Wepfer
Market Manager Eastern Switzerland
phone: +41/78/635-96-00

or

Toby Nicol
Head of Corporate Communications
phone: +44/1582/525-339

Grandfield
Charles Cook / Clare Abbot
phone: +44/20/7417-4170

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