Budget airline easyJet has reported a 45 per cent fall in full-year profit despite flying more passengers as high fuel prices bite.
For the year to September 30th, passenger numbers were up 17.3 per cent to 43.7 million, but easyJet posted a pre-tax profit of just £110 million, compared to £202 million last year.
This works out to just £2.37 per seat flown, against £4.30 in 2007.
The main increase in costs was down to the soaring fuel price, which rose to £4.08 per seat, the carrier said, although half of this was recovered through cost-cutting measures.
Andy Harrison, easyJet chief executive said: "We recognise that economic conditions will be very difficult and easyJet is planning accordingly, which means focusing on offering customers great value, driving down controllable costs and preserving cash.
"easyJet is well placed to emerge as a winner, due to our cost base, strong balance sheet, new fuel efficient fleet and the quality of the easyJet network."
The airline said its winter bookings for the first quarter of 2009 are slightly ahead on last year.
However, the outlook for summer 2009 is uncertain due to the difficult macro-economic environment and yields will depend on the extent of the fall in consumer expenditure in Europe and the level of competitor capacity reduction in the market, easyJet added.
The carrier said it expects further downsizing and consolidation of many weaker competitors.
Airlines have been struggling to survive in the face of falling passenger numbers and higher costs.
While several operators have already folded including XL, Silverjet, Sterling and Zoom others are consolidating.
Ryanair has predicted there will only be a handful of airlines left after the recession, including itself, which will mean opportunities for the survivors.