EASYJET has cited the introduction of allocated seating, cost discipline and new base openings as it overcame tough competition in the short haul market to deliver a 51% rise in pre-tax profits.
The Luton-based carrier, which flies to cities around the UK and Europe from Inverness, Aberdeen, Edinburgh and Glasgow, reported earnings of £478 million for the year to September 30.
Its fortunes sharply contrast recent statements from low-cost rival Ryanair, which issued its second profit warning in as many months in early November.
EasyJet's profits came at the upper end of expectations as turnover leapt 10.5% to £4.26 billion.
The company said passenger numbers rose by 4% to £60.8m and revenue per seat increased by 7% to £62.58m, with a rise in business travellers contributing to an increase in spend.
However the cost per seat increased by 3.9% on a constant currency basis, 2% of which was driven by increased airport charges in Spain and Italy and 0.8% by disruption and de-icing costs. EasyJet said these pressures were offset by the impact made by the easyJet lean programme.
Investors lapped up the results by sending the share price soaring by more than 7%, closing the day up 89p at 1345p.
The latest rise means the stock has risen by more than 100% in the last 12 months.
Analyst Marc Kimsey at Accendo Marks said easyJet has "demonstrated the subtle difference between offering value and cutting corners".
He said: "Where peer Ryanair has been plagued with customer service complaints and safety concerns, easyJet has been on hand to offer a refreshing alternative - flexible ticketing and poaching of top business routes has attracted holiday makers and corporate customers alike."
Richard Hunter at Hargreaves Lansdown was similarly upbeat. He recommended the stock as a strong buy, but warned that challenges are on the horizon.
He said: "Less positively, tough comparatives with the Olympic year and the situation in Egypt drag, competition is intensifying as evidenced by the recent Ryanair comments and costs per seat remain on an upward path due largely to higher charges at regulated airports.
"Even so, easyJet is enjoying its moment in the sun in terms of both current and future earnings."
In light of the results, easyJet announced plans to return £175m to shareholders via a special dividend of 44.1% per share. This is in addition to the regular ordinary dividend of £133m or 33.5p per share, based on its existing policy of paying out one-third of annual profit after tax.
It also confirmed plans to invest in its fleet, having secured approval from shareholders to order up to 135 new aircraft from Airbus between 2015 and 2022.
In May easyJet acquired Flybe's 25 landing slots at Gatwick for £20m, which will see it run daily services between Inverness and the London airport from March.
The period also saw it open new bases in Hamburg and Naples, and consolidate its position in key airports, noting it holds a share of short haul flights of more than 40% at Gatwick, Milan Malpensa and Basel.
The airline, which is the largest short haul operator in the UK, added it had increased its share in regional flying in France and grown strongly in Italy.
EasyJet chief executive Carolyn McCall, one of four women who head FTSE-100 companies following this week's appointment of Liv Garfield at Severn Trent, said: "EasyJet has delivered a strong full-year performance and made significant progress against executing its strategic priorities.
"The results reflect easyJet's continued structural advantage in the European short-haul market against both the legacy and low-cost competition."
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