easyJet braces for profit crash on nosedive in post-Brexit pound

The British low-cost airline easyJet warned Thursday that annual profits would slump by almost a third, hit by a Brexit-driven tumble in the pound and terror attacks.

EasyJet forecast annual pre-tax profits would dive by about 28 per cent to between £490 million (Dh2.29 billion) and £495m.

“We have been disproportionately affected by extraordinary events this year but our excellent network, cost control and revenue initiatives and our strong balance sheet underpin our confidence in the business,” said the chief executive Carolyn McCall.

On a brighter note, easyJet also announced it had carried a record 22 million passengers in the three months to the end of September, despite what it described as “major external shocks” for the sector.

“EasyJet has performed strongly in a difficult operating environment for all European airlines and in the three month period has been affected by major disruption, exchange rate fluctuations impacting holiday travel costs, the impact on demand from terrorist events and the low cost of fuel continuing to drive increased market capacity,” it said.

The airline, which is based in Luton airport to the north of London, forecast that the slumping pound would hit earnings this year to the tune of £90m. That was more than double the previous guidance of £40m.

Sterling tumbled following Britain’s shock June 23 vote in favour of leaving the European Union.

The currency slid even further this week to fresh 31-year dollar lows after the prime minister Theresa May vowed to kick off the Brexit process by the end of next March.

The collapsing value of the pound weighs on easyJet’s performance because it makes dollar-priced jet fuel more expensive, increasing the cost of running aircraft.

The carrier will publish its annual results on November 15 for the group’s fiscal year, which runs to September 30.


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