EasyJet says weak pound is hitting harder than expected
Easyjet has warned the weakness of the pound will cost it £105 million this financial year, more than the £90 million it had expected.
The airline reported a ‘solid’ first quarter ending December 30, but said its profit would be hit harder than it thought by the fall-out of Brexit.
Passengers numbers rose by 8.2% to 17.4 million, driven by a growth in capacity of 8.6% to 19.3 million seats.
Load factor was broadly flat, falling by 0.3 percentage points to 90%
Chief executive Carolyn 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.
"Consumer demand remains strong with passenger growth of 8.2%, revenue growth of 7.2% and headline cost per seat reduction, at constant currency, of over 2%.
"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 underlying year-on-year revenue per seat trend continues to improve, supported by resilient demand across all our European markets. Forward bookings are ahead of last year."
Looking forward, easyJet said the pricing and operating environment remains tough, ‘with fuel prices remaining low and continued strong growth in European short haul capacity impacting yields across the industry’.
It plans to grow seat capacity by up to 9% in the first half year and by up to 9% in the full year, ‘subject to normal levels of disruption and some investment in resilience’.
Bev
Editor in chief Bev Fearis has been a travel journalist for 25 years. She started her career at Travel Weekly, where she became deputy news editor, before joining Business Traveller as deputy editor and launching the magazine’s website. She has also written travel features, news and expert comment for the Guardian, Observer, Times, Telegraph, Boundless and other consumer titles and was named one of the top 50 UK travel journalists by the Press Gazette.
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