easyJet Shares Edge Higher on Strong Earnings, Upgraded Holiday Target

easyJet (LON: EZJ) has reported a robust financial performance for the year ended September 30, 2025, fueled by strong earnings growth and the early achievement of its easyJet holidays target.

The airline's stock is up around 0.6% in early Tuesday trading.

Headline Numbers:

• Revenue: Group revenue increased by 9% to £10.106 billion.
• Profit: Headline profit before tax (PBT) rose by 9% to £665 million. Headline EBIT increased by 18% year-on-year to £703 million.
• Balance Sheet: Net cash position strengthened significantly to £602 million, up from £181 million the previous year.

The company's strong cash position provides it with considerable financial flexibility. easyJet has proposed a dividend of 13.2 pence per share, representing 20% of headline profit after tax, demonstrating its commitment to returning value to shareholders.

Driver Breakdown:

• easyJet Holidays: Exceeded expectations, achieving its medium-term PBT target of £250 million ahead of schedule. The target has been upgraded to £450 million PBT by FY30.
• Operational Performance: Improvements in punctuality (OTP +3ppts YoY to 72%) and customer satisfaction (CSAT +4ppts YoY to 80%) contributed to earnings growth.
• Cost Management: Headline CASK improved by 3% YoY.

Kenton Jarvis, easyJet's CEO, said: “Since setting our medium-term targets in 2023 we have made significant progress, delivering a 46% improvement in profit before tax, adding 9% this year through the continued, successful execution of our strategy. easyJet holidays is today launching an even more ambitious goal having achieved its target early.” The CEO's statement reinforces the company's strategic focus and confidence in future growth.

Looking ahead, easyJet anticipates ASK capacity to grow by approximately 7% in FY26, with an average sector length increase of around 4%. The company also plans to increase easyJet holidays customers by up to 15%. Forward bookings for Q1'26 are 81% sold (+2ppts YoY), and Q2'26 is 26% sold (+1ppt YoY).

The company's balance sheet strength will support fleet modernization and growth plans. easyJet expects its net book value of owned assets to grow to over £7.5 billion by FY28.

While challenges remain, particularly in improving airline PBT performance during the winter season, the overall outlook for easyJet appears positive.

The company's strategic investments, cost management efforts, and strong performance of its holidays division position it well for future growth. The airline headline total CASK is expected to see modest inflation as cost and operational efficiencies alongside favourable fuel prices partially offset market-wide cost inflation