EasyJet in carbon pledge as price wars hit profits

EASYJET today became the first major airline to go “carbon neutral”, offsetting the environmental impact of its flights by investing in forestry, renewable energy and water projects. The budget airline claims it can offset the carbon from its planes at a cost of just £25 million a year.

Its move puts pressure on rivals to do the same. British Airways earlier made a commitment to net zero carbon flying, but says it will take until 2050 to reach that goal. Chief executive Johan Lundgren admits offsetting carbon “is not perfect” and that in the longer run airlines need to do more to cut fuel use. But he rejected claims made by some campaigners that going carbon neutral is “greenwashing”.

Airlines account for 2% of carbon dioxide emissions, but planes also emit other damaging chemicals. “Carbon offsetting is not a scam, it is scientifically proven,” he said. The move will make easyJet “one of the largest carbon emission-offsetting companies in the world”.

He was talking as easyJet unveiled a 26% fall in annual profits to £427 million. Revenues rose by 8% to £6.4 billion, though revenue per seat fell a little to £60.81. EasyJet also confirmed the launch of a package holidays business in the wake of the collapse of Thomas Cook. “The timing is favourable because a major player is no longer in the market,” he said. “The competitive landscape has slightly changed in our favour.” The company notes that it flies 20 million customers to Europe’s largest destinations but that only 500,000 of them book accommodation via easyJet. It is targeting the other 19.5 million fliers.

The UK package holidays market alone is worth £13 billion a year, said easyJet. The shares rose 4% to 1326p, despite a 25% cut in the dividend to 43.9p. Lundgren said the concern over Brexit was easing for businesses and consumers. It has dragged on so long that it has become “normalised”, he said. “People are getting on with their lives."