EasyJet 2012 Annual Report Download - page 8

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Dear Shareholder,
I am pleased that your Company has delivered continued strong
results this year despite the economic headwinds that we face.
Progress this year
The strength of easyJet’s business model is based around a pan
European network to primary airports, delivered with friendly service,
efficiency and at the lowest cost. This has enabled it tothrive,
evidenced by the 27.9% increase in pre-tax profit to £317million.
Return to shareholders
Due to the strength of the performance this year, and the Board’s
confidence in the strength of easyJet business model, strategy
and people, the Board has recommended increasing the level of
ordinary dividend paid annually from a ratio of five times cover to
three times cover. Consequently an ordinary dividend of 21.5 pence
per share will be paid in respect of the financial year ended
30September 2012, an increase of 11pence per share compared
to the prior year.
Making a strong business stronger
The easyJet team has also taken proactive steps this year to further
strengthen the business. Steps have been taken to ensure that
returns are maximised from the capital deployed in our aircraft. As a
consequence the base in Madrid is being closed. The Company has
redeployed the capacity released to more profitable opportunities in
France, Switzerland, UK and Italy where the potential for shareholder
value is improved. To ensure easyJet remains competitive on cost
and aircraft performance the team are well advanced in its technical
and commercial evaluation of the next generation narrow body
aircraft and engine technology. The Company has stepped up
investment in leadership development and succession planning
ensuring it has the capabilities necessary to deliver superior returns
inthe future against a challenging environment.
Regulatory environment
It is vital that aviation operates within a regulatory environment that
rewards efficient behaviour and guards against protectionism which
still shields airports, airlines and ground handling from true and full
competition. In particular, the European Union must now press
ahead with reform of the allocation of slots at airports to enable
new entrants to build up enough frequencies to mount serious
challenges to the legacy operators and overhaul the practices
around ground handling to ensure there is real competition at
everyairport. These reforms will benefit the European economy
asconsumers will benefit from more new routes, more services
andaffordable fares.
easyJet welcomes the Davies Commission as easyJet believes
that the UK aviation sector needs a coherent roadmap for aviation
capacity and infrastructure that integrates air, road and rail links
and ensures we have a thriving and robust aviation sector centred
around customer needs. However any investment in infrastructure
must be cost effective and focused on delivering the level of service
that customers need.
Conclusion
Finally the hard work and commitment of all of easyJet’s people has
been instrumental to its success this year and I would like to thank
them for making 2012 such a successful year.
Sir Michael Rake
Non Executive Chairman
Our ambition is to be Europe’s
preferred short-haul airline,
delivering market leading returns.
Sir Michael Rake
Non Executive Chairman
Overview
Chairman’s introduction
easyJet plc
Annual report and accounts 2012
06