BUDGET airline easyJet has announced a drop in annual profits despite carrying 17.3 per cent more passengers over the year.

The carrier blames higher fuel costs for the 45 per cent fall in profits in the year to 30 September, from £202 million to £110 million. Although easyJet holds fuel prices responsible for the crash in profits, the airline recovered over half of the fuel cost increases – £210 million, or £4.08 per seat – through ‘revenue improvements’.

And the intention is for easyJet’s capacity to increase rather than contract, according to the airline’s financial consultant, Financial Dynamics. Although he did not wish to comment on specific results of easyJet’s annual report, Assistant Economic Development Minister Alan MacLean, who has responsibility for the Airport, said that it was a positive sign that the passenger numbers were up.

The chief executive of easyJet, Andy Harrison, said that future economic conditions would be ‘difficult’ and that the airline planned to focus on offering customer value, cutting costs and saving cash. ‘Our bookings for the first quarter of 2009 are slightly ahead of last year, which is partly a reflection of the reduction in competitive capacity on our routes and partly our own decision to restrict our growth in seats flown,’ he said.