EasyJet Profits Take Off but FTSE 100 Demotion Fears Grow After FY25 Results – What Investors Need to Know (25 November 2025)

Strong growth in package holidays, weaker winter outlook and looming FTSE reshuffle put the budget airline in the spotlight.

EasyJet’s FY25 results: profits up, share price down

EasyJet has delivered its third consecutive year of earnings growth, with full‑year 2025 numbers that comfortably beat expectations – yet the market reaction this morning has been lukewarm and FTSE 100 demotion risk is firmly on the radar. ^[1]

According to the company’s regulatory filing for the 12 months to 30 September 2025, headline profit before tax rose 9% to £665m, while headline EBIT climbed 18% to £703m. Group revenue increased to about £10.1bn, up roughly 9% year on year. ^[2]

The real star, however, is easyJet holidays, the package‑tour arm whose performance has prompted a sharp upgrade to long‑term profit targets and is now central to the group’s equity story. ^[3]

Despite these strong headline numbers, easyJet shares traded around 470–480p in morning London dealing, down roughly 1–2% on the day and in the mid‑teens lower year‑to‑date, leaving the airline perilously close to the FTSE 100 “trapdoor” ahead of December’s index reshuffle. ^[4]

FY25 results at a glance

Key figures for the year to 30 September 2025:

Headline PBT: £665m, up 9% year on year. ^[5]
Headline EBIT: £703m, up 18%, with both airline and holidays divisions contributing to growth. ^[6]
Group revenue: about £10.1bn, roughly 9% higher than last year. ^[7]
Airline headline PBT: £415m; capacity (measured in seats) up around 4% to 104m. ^[8]
easyJet holidays PBT: £250m, up by roughly a third and exceeding the previous medium‑term target years ahead of schedule. ^[9]
Package holidays: around 3.1m customers, up about 20%, with revenue from the holidays arm jumping roughly 27% to £1.4bn. ^[10]
Ancillary revenue: extras such as seat selection, baggage and onboard sales now account for about a quarter of group revenue, underlining the importance of add‑ons to the model. ^[11]
Operational performance: on‑time performance improved to the low‑70% range and customer satisfaction reached multi‑year highs around 80%, after several difficult post‑pandemic summers. ^[12]
Balance sheet: net cash of roughly £600m and total available liquidity close to £4.8bn, alongside an improved return on capital employed of about 18%. ^[13]
Dividend: a proposed payout of 13.2p per share, equating to around £100m, or roughly 20% of headline profit after tax. ^[14]

Management has reaffirmed its medium‑term ambition of more than £1bn in profit before tax, signalling confidence that the earnings momentum can be sustained beyond FY25. ^[15]

Package holidays: the engine of growth

Today’s coverage across the Financial Times, the Guardian, City A.M., Interactive Investor and The Armchair Trader shows remarkable agreement on one point: easyJet holidays is now the group’s growth engine. ^[16]

Highlights from the holidays division include:

£250m PBT, achieved earlier than planned, triggering a new 2030 profit target of £450m for the unit. ^[17]
An estimated 20% jump in customers to about 3.1m, with demand focused on sun destinations such as Tenerife, Lanzarote, Mallorca and the Turkish coast. ^[18]
Average package prices up around 5%, yet volumes still rising – evidence that families continue to ring‑fence their annual holiday even in a cost‑of‑living squeeze. ^[19]
UK package‑holiday market share increasing from about 7% to 10%, according to City A.M., as easyJet leans into its value positioning. ^[20]
A capital‑efficient model: the holidays arm generated an estimated 18% ROCE, above last year and firmly in the “high‑teens” range targeted by management. ^[21]

Forward bookings underline the strength of this business. EasyJet says around 80% of holidays for the first half of the new financial year are already sold, and it is targeting a further 15% rise in holidays customers in the coming period. ^[22]

Strategically, the carrier is doubling down on this vertical:

Expanding its hotel portfolio and city‑break offering. ^[23]
Investing in new bases and routes that skew towards leisure travel, including Milan Linate, Rome Fiumicino and Southend, with Newcastle and Marrakech to follow in 2026. ^[24]
Partnering with Tesco Clubcard, putting the holidays brand in front of over 20m UK households and reinforcing its value‑led positioning. ^[25]

It is not an exaggeration to say that easyJet holidays now accounts for more than a third of group profit and much of the long‑term equity story. ^[26]

So why is the share price under pressure?

Given the numbers, it might seem surprising that the shares fell on the day and are down roughly 15–16% year‑to‑date, even as the wider FTSE 100 has gained around 15% over the past 12 months. ^[27]

Several factors are weighing on sentiment:

1. Revenue per seat is slipping

The airline division grew capacity but unit revenue (RASK) fell about 3% year on year, with only a modest improvement in the second half. ^[28]

In simple terms, easyJet flew more seats but earned slightly less per kilometre on each one. That matters in a capital‑intensive industry where margins can be thin.

2. Winter trading still looks tough

Management and analysts alike flag that winter remains a drag on profitability:

Reuters notes that guidance points to some softness in winter bookings, even after a strong summer. ^[29]
The Armchair Trader highlights that the ramp‑up of new bases in Milan and Rome, which required roughly £20m of investment in summer and another £30m this winter, will weigh on short‑term margins as those networks mature. ^[30]
EasyJet itself warns that geopolitical tensions and route suspensions to destinations such as Tel Aviv and Amman are adding uncertainty into the peak‑season/winter transition. ^[31]

3. Budget and tax worries

Today’s City A.M. coverage directly links easyJet’s weak share price to concerns over the UK Autumn Budget, with investors nervous about:

Potential tax hikes that squeeze household disposable income. ^[32]
A planned increase in Air Passenger Duty (APD) on short‑haul economy tickets from £13 to £15 next April, the first rise in 14 years, which could nudge fares higher and test demand. ^[33]

Against a backdrop where UK business and consumer confidence is reported to be at its weakest since the financial crisis, airlines and leisure stocks are natural targets for caution. ^[34]

4. A long, painful share‑price hangover

Interactive Investor’s analysis points out that, despite three years of earnings recovery, easyJet’s market value is still around 60% below pre‑pandemic levels and roughly 70% below its peak a decade ago. ^[35]

That long‑term underperformance has left many investors sceptical that the current profit run‑rate is sustainable, particularly with cost inflation (wages, airport charges and environmental levies) still in the system even as fuel costs ease. ^[36]

FTSE 100 demotion risk: how real is the threat?

The FTSE quarterly review in December now looms large over easyJet’s shares.

Where easyJet sits today

An unofficial FTSE All‑Share ranking, based on 21 November 2025 closing prices, places easyJet at around 105th by UK market capitalisation. ^[37]
Under FTSE Russell rules, a current FTSE 100 member is automatically demoted if it falls below 110th place on review day, while a non‑member is automatically promoted if it climbs into the top 90. ^[38]

In other words, easyJet is already sitting between the “entry” and “exit” lines. A further slide in the share price could easily push it into the danger zone below 110th place and trigger relegation to the FTSE 250.

City A.M. and several broker commentaries explicitly describe the airline as “in the firing line” for potential relegation, given its mid‑teens share price fall this year against a double‑digit rise for the wider blue‑chip index. ^[39]

What FTSE relegation would mean

A drop into the FTSE 250 would not alter easyJet’s underlying business, but it would have tangible market consequences:

Index‑tracking funds that replicate the FTSE 100 would have to sell the stock, creating a short‑term wave of forced selling. ^[40]
Liquidity might decline over time as some institutional mandates limit exposure to mid‑cap names.
The perceived “prestige premium” of FTSE 100 membership would disappear, which can matter for sentiment, coverage and inclusion in wider portfolios.

History shows, however, that relegation does not necessarily spell long‑term doom; several former blue‑chips have bounced back after a spell in the FTSE 250 once their operational performance stabilised. ^[41]

Analyst reaction: optimism with caveats

Sell‑side analysts are broadly constructive on today’s numbers, but with clear warnings about the near‑term outlook:

UBS reiterated a “Buy” rating with a 750p price target, noting that operating profit beat both its own and consensus forecasts and highlighting strong booking trends. ^[42]
RBC Capital Markets maintained an “Outperform” stance with a 620p target, praising the profit beat but warning that the FY26 outlook looks more mixed and consensus earnings forecasts may need trimming. ^[43]
Barclays remains “Overweight”, while J.P. Morgan and Bernstein are more cautious with Neutral/Market‑Perform calls. ^[44]
Interactive Investor describes the shares as on an “undemanding valuation” given the growth in ancillaries and holidays, and notes that market consensus still leans towards “buy” despite the recent slide. ^[45]

Across these notes, a few themes repeat:

Holidays is the star – a high‑margin, high‑ROCE business that has hit its initial profit targets early. ^[46]
Cost discipline is real – unit costs (CASK) have fallen, particularly fuel cost per seat, partly thanks to fleet renewal. ^[47]
But the macro and political backdrop is tricky – weak UK confidence, potential tax increases in Wednesday’s Budget, and enduring geopolitical uncertainty could pressure winter demand and yields. ^[48]

What this means for shareholders

For existing or prospective shareholders, the picture that emerges today is nuanced rather than straightforwardly bullish or bearish:

The bullish case

Structural shift towards leisure packages: easyJet holidays gives the group a higher‑margin, capital‑light profit stream that is less sensitive to business travel cycles.
Improving operations and finances: better punctuality, strong cash generation, rising ROCE and a reinstated dividend all suggest a business that has largely repaired its post‑Covid balance sheet. ^[49]
Broker support: multiple major houses still see upside to the current share price, with targets significantly above today’s 470–480p trading range. ^[50]

The bear (or cautious) case

Cyclical exposure: the core short‑haul airline remains tied to consumer confidence, which is fragile as the UK heads into a potentially tax‑heavy Budget. ^[51]
Winter and yield pressures: soft revenue per seat and slow‑to‑mature new bases make it harder to translate summer strength into year‑round profitability. ^[52]
Index risk: a slip below the FTSE 100 auto‑relegation line could trigger technical selling and add another layer of volatility. ^[53]

For now, easyJet looks like a company whose fundamentals are improving faster than its share price, but where macro headwinds and index mechanics are keeping investors cautious.

Key risks and opportunities to watch next

Looking beyond today’s headlines, several signposts will shape the story over the coming months:

1. Wednesday’s UK Budget

Any additional tax on flying or broader measures that crimp disposable incomes could weigh on discretionary travel in 2026. ^[54]

2. FTSE 100 December review

The decisive ranking snapshot will be taken at the end of this week; easyJet’s position around 105th by market cap means modest share‑price moves could tip the balance either way. ^[55]

3. Winter trading update and Q1 bookings

Management has flagged 81% of airline seats and roughly 80% of holidays already sold for the first part of FY26. Investors will want to see whether yields and load factors hold up as macro conditions tighten. ^[56]

4. Execution on fleet and base expansion

The planned upgauging of the fleet, with dozens of larger, more efficient Airbus aircraft due for delivery between FY26 and FY28, and the ramp‑up of new bases across Europe and North Africa, must translate into higher profits rather than just higher capital intensity. ^[57]

Final thought

On 25 November 2025, easyJet is a classic market puzzle: operationally stronger than it has been in years, strategically reshaped around profitable package holidays – yet still trading like a stock investors don’t quite trust.

Whether that disconnect closes will depend less on the strength of next summer’s holiday bookings – which already look robust – and more on how the airline navigates a fragile UK economy, political risk on tax and the high‑stakes FTSE 100 reshuffle now just days away. ^[58]

This article is for informational purposes only and does not constitute investment advice or a recommendation to buy or sell any security. Always conduct your own research or consult a regulated financial adviser before making investment decisions.

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