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Last Updated: Tuesday, 18 November, 2003, 08:52 GMT
Easyjet sees annual profits drop
Easyjet plane takes off
Takeover costs have hit budget carrier Easyjet's annual profit
Budget airline Easyjet has reported a worse-than-expected 28% drop in full-year profits.

But the UK carrier said it remained cautiously optimistic about its performance for the current year.

Easyjet said its pre-tax profits slipped to 52m ($88m) for the year to 30 September.

The company said it had been hit by the fallout from the Iraq war earlier in the year and costs relating to its takeover of rival no-frills airline Go.

Ups and downs

Easyjet has traditionally struggled in its first half, with weaker demand in autumn and winter during the first six months of its financial year being offset by the peak summer holiday season in the second half.

The airline has also had to cut fares in a bid to fill expanding capacity while fending off stiff competition from rivals such as Irish-based carrier Ryanair.

As a result, Easyjet said its sales for the year had jumped 69% to 932m.

Chief executive Ray Webster said that although there remained "a degree of uncertainty, the economic environment is improving and is substantially better than at this time last year".

He said: "I am cautiously optimistic about our performance in the current year."

Mr Webster said in the past year Easyjet had introduced 21 new routes into service, many from regional airports such as Newcastle.

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