EasyJet plc (EZJ) is one of Europe’s largest low-cost carriers, serving over 30 countries with a fleet of roughly 340 aircraft. Known for its short-haul dominance across key leisure and business routes, the airline’s network strength in the UK and continental Europe provides a resilient demand base, complemented by the growing easyJet Holidays division.
After years of post-pandemic recovery, easyJet’s fundamentals have stabilized. FY 2024 marked one of the carrier’s most profitable years since 2019, with headline profit before tax rising 34% to £610 million and return on capital employed improving to 16%. But shares are still down roughly 15% year to date, reflecting investor caution over inflation, capacity pressures, and fuel costs.
The company’s hybrid model, a blend of low-cost efficiency and premium network exposure, continues to deliver consistent operational gains. easyJet Holidays, now contributing nearly a third of profits, remains a standout growth engine, with pre-tax profit up 56% last year. Meanwhile, fuel cost reductions, improved aircraft utilization, and a disciplined capacity strategy have begun translating into margin resilience despite a challenging macro backdrop.
Yet despite these positive trends, sentiment remains grounded. The airline’s progress toward its £1 billion profit target is clear, but valuation recovery has lagged operational performance. For investors, the question heading into 2026 is whether the stock’s muted trajectory reflects structural headwinds or simply an overlooked turnaround that hasn’t yet cleared the runway.
Financial Story: A Reset year, Not a Lost One
| Metric | Period | Value | YoY Change | Commentary |
|---|---|---|---|---|
| Revenue | FY 2024 | £8.17 billion | +14% | Driven by higher fares and load factors |
| Headline Profit Before Tax | FY 2024 | £610 million | +34% | Strong summer profitability and cost control |
| easyJet Holidays PBT | FY 2024 | £190 million | +56% | Segment growing faster than airline operations |
| ROCE | FY 2024 | 16% | +3 ppts | Progress toward mid-teens long-term target |
| Headline Loss Before Tax | H1 2025 | £394 million (loss) | Improved YoY | Seasonal loss narrowed on cost discipline |
| Headline Profit Before Tax (Q3 2025) | Q3 2025 | £286 million | +£50 million | Stronger summer travel and pricing momentum |
| Fuel CASK Reduction | Q3 2025 | −7.3% YoY | — | Reflects improved efficiency and moderating fuel prices |
| Holidays PBT (Q3 2025) | Q3 2025 | £86 million | +£13 million | Solid growth across core leisure destinations |
| Forward Bookings (Q4 FY 2025) | — | 67% sold (+1 ppt YoY) | — | Steady demand heading into FY 2026 |
FY 2024 marked EasyJet’s strongest year of profitability since before the pandemic, with headline PBT up 34% to £610 million. The carrier’s ability to pass through higher fares, maintain load factors, and expand its Holidays division helped offset inflationary costs. ROCE rose to 16%, while profit per seat increased 24% year-over-year, indicating progress toward its £7–10 per-seat target range.
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The first half of FY 2025, however, brought a predictable seasonal dip, with a £394 million pre-tax loss. Adjusted for the timing of Easter and one-off items, results still showed a modest improvement from the prior year as cost per available seat (CASK) ex-fuel declined 4% and fuel CASK fell 8%. These efficiency gains helped narrow winter losses and support stronger cash generation going into the peak summer months.
By Q3 2025, easyJet had regained altitude, delivering £286 million in pre-tax profit, an increase of £50 million YoY. ASK capacity grew 7.9%, RASK inched 0.5% higher, and total headline CASK fell 5%, marking a solid recovery in unit economics. EasyJet Holidays continued its standout performance, contributing £86 million of profit and expanding 13% YoY as the company deepens integration between flights and packaged holidays.
1. Cost Discipline and Operational Efficiency
EasyJet’s cost base continues to benefit from structural improvements. The company expects a 10% reduction in fuel CASK for FY 2025, supported by fleet renewal and better route utilization. Headline CASK excluding fuel is expected to decline slightly year-over-year, reflecting efficiencies in scheduling, staffing, and maintenance.
The modernization of easyJet’s Airbus A320neo fleet, which now accounts for nearly half of its aircraft, provides long-term unit-cost advantages. Average gauge is projected to reach 191 seats by FY 2028, while owned aircraft are expected to exceed 60% of the total fleet, further lowering leasing expenses. Together, these measures could unlock more than £3 per seat in cost savings over the medium term.
2. Demand Resilience and Holiday Segment Expansion
Despite economic uncertainty, consumer demand has proven resilient across key leisure markets. Forward bookings for Q4 2025 are currently 67% sold, up one percentage point year-over-year, with H2 expected to outpace H1 capacity growth. ASK growth for FY 2025 is forecast at around 8–9%, supported by higher average sector length and continued recovery in Southern European routes.
EasyJet Holidays continues to outperform expectations. The division recorded £86 million in profit in Q3 alone and remains on track to achieve £250 million in annual profit before tax by FY 2028. This vertical integration, combining flights, accommodation, and customer data, is helping easyJet capture a greater share of discretionary travel spend while diversifying revenue beyond ticket sales.
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3. Capital Strength and Strategic Outlook
The balance sheet remains solid, with easyJet projecting ongoing cash generation through disciplined capital management. While winter capacity utilization remains seasonally lower, reduced losses and strong summer profitability have strengthened liquidity, positioning the airline well to weather macro uncertainty.
Medium-term guidance remains ambitious but attainable: >£1 billion in profit before tax and sustained double-digit ROCE. Management’s confidence reflects an ongoing shift from volatility to predictability, leveraging scale, data-driven pricing, and cost control to stabilize margins. As easyJet matures, the focus is shifting from recovery to optimization, a dynamic that could eventually support a re-rating if execution continues.
The TIKR Takeaway
EasyJet’s 2025 story is one of quiet execution rather than dramatic transformation. The fundamentals are improving, the business mix is broadening, and profitability is steadily recovering. Yet investor confidence remains fragile, with macro headwinds and fuel price volatility still casting shadows over the sector.
Still, easyJet looks better positioned than most regional peers to navigate Europe’s aviation cycle. Its lean cost base, integrated Holidays business, and balance sheet flexibility give it the tools to sustain margin recovery through 2026. The next phase of easyJet’s turnaround may be less about growth and more about proving that the turbulence of the past few years is truly behind it.
Should You Buy, Sell, or Hold easyJet?
EasyJet’s current financial profile supports a cautiously optimistic view. With profits recovering, unit costs falling, and non-fuel CASK trending lower, management’s £1 billion PBT goal is within reach. The balance sheet is stronger, and forward bookings remain healthy despite inflationary headwinds.
However, energy costs, geopolitical risks, and persistent pricing pressure across Europe could continue to cap upside potential. For now, easyJet represents a hold, a stable long-term story where operational momentum is clear, but investor sentiment has yet to reprice the progress made fully.
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!