easyjet (EZJ) Investor Update summary

Capital allocation and fleet strategy

• Focus on maximizing returns from the existing fleet through network optimization, improved aircraft utilization, and selective placement of new neos to deliver over GBP 3 per seat benefit by 2028, mainly through upgauging from A319s to larger models.

• Targeting over 75% neo-ownership in the fleet, aiming to double network fleet value from GBP 4 billion to GBP 8 billion by 2028, with owned aircraft net book value projected to reach about GBP 8 billion by FY28.

• Strong liquidity position with GBP 5 billion+ in liquidity and GBP 3 billion gross cash, supporting disciplined capital deployment and robust investment grade balance sheet.

• Capital allocation framework prioritizes robust balance sheet, liquidity, and investment in profitable growth, with aircraft reallocated to highest returning bases.

• Ordinary dividend reinstated, with a 20% headline PAT dividend on FY24 results.

Profitability and cost management

• Achieved GBP 455 million profit in FY2023, with a goal to more than double profit before tax to over GBP 1 billion and target GBP 7–GBP 10 PBT per seat.

• Winter productivity improvements led to a 12% capacity increase with only a 5% fleet increase, reducing winter losses by GBP 60 million despite regional disruptions.

• Cost discipline remains a priority, with cost ex-fuel kept flat and a commitment to low single-digit increases, and upgauging and fleet renewal expected to deliver around GBP 3 per seat cost savings.

• Targeting high teen airline EBITDAR margins and reducing winter losses through profitable capacity restoration.

• Through-cycle CapEx estimated at GBP 1.3-1.5 billion per year, supported by strong cash generation and multiple financing options.

Ancillary and holidays growth

• Ancillary revenue growth driven by dynamic pricing, in-flight retail, and IT investments for better merchandising.

• Holidays segment aims for over GBP 250 million PBT and 7% UK market share, with a structural advantage from direct website traffic.

• Expansion into Switzerland, Germany, and France, with a measured approach to avoid unsustainable marketing spend.