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Pound's fall hits easyJet profits forecast
WEAK sterling and the impact of fuel prices will reduce profits by £105 milion this year for budget airline easyJet.
The airline’s forecast comes as it reported "solid" trading in the final three months of 2016. Passenger numbers are up by more than 8% to 17.4 million and revenue rose by 7.2% to £997 million.
However the falling value of the pound led to a net reduction in revenue per seat of 1.2%.
Cost control remains strong at the Luton-based airline, with £14million of savings in the quarter through engineering and maintenance, fleet upgauging and volume-related airport savings.
Chief executive Caroline McCall said “easyJet has delivered a solid first quarter with revenue, cost and passenger numbers in line with expectations. This is despite a tough pricing and operating environment.
“The weakness of sterling and the impact of fuel combined are £35 million worse than previously expected but easyJet has made good progress in reducing costs in those areas where we have more control such as engineering, maintenance, non-regulated airports and overheads.”
The year-on-year revenue per seat trend continues to improve, she added, and demand remains strong in the airlines European markets.
“easyJet continues to grow with purpose in our core markets with capacity growth of up to 9% across our network. Our focus has been to invest to deliver long-term sustainable profitable growth by strengthening our leading positions at Europe’s biggest and most popular airports.”
Despite the Brexit vote, easyJet has committed to maintaining its headquarters at London Luton Airport. However, the airline is planning a separate presence on the European mainland, to be in place by the time the UK leaves the European Union, in order to ensure its continued operations in Europe.
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