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EasyJet cuts growth plan as European economies weigh on fares
[LONDON] EasyJet said it will trim expansion next year in an effort to bolster fares and cope with uncertain demand amid stuttering European economic growth.
The capacity increase in fiscal 2020 will be at the lower end of an historic 3 per cent to 8 per cent range, down from 10 per cent in the 12 months ended Sept 30, Europe's second-biggest discount airline said Tuesday.
Chief Executive Officer Johan Lundgren said in a statement forward bookings for the first half of fiscal 2020 are "reassuring" and slightly ahead of last year.
The company reported a 2019 EasyJet pretax profit of £427 million (S$753 million), down from £578 million a year earlier. It said last month the figure would be in a £420 million and £430 million range.
Passenger numbers increased by 8.6 per cent to 96.1 million. EasyJet hasn't given up on growth and recently bought a batch of operating slots at London Gatwick Airport in a deal worth more than £30 million.
Mr Lundgren said that from today EasyJet will become the first carrier in the world to make all flights net zero carbon by offsetting emissions across its network.
Shares of EasyJet have gained almost 16 per cent this year, compared with an average advance of 4.2 per cent for members of the Bloomberg EMEA Airlines Index, valuing the company at £5.07 billion.