EASYJET is expecting full year-profits to come in at the top end of its forecasts, but has warned that the impact of the Brexit vote will cost it £100 million.
The budget airline, which flies to 19 routes from Glasgow and 38 from Edinburgh, carried a record 24.1 million passengers in the three months to September 30 as holidaymakers made the most of reduced fares to beach destinations.
Full-year pre-tax profit is expected to come in between £405m and £410m, at the upper end of the previously guided range.
Chief executive Carolyn McCall, who will leave the company to take the top job at ITV in January, called it a “good performance in a rapidly evolving and consolidating market”.
But the forecast confirms the airline will fall far short of last year’s £495m profit because of a £100m hit from pound’s nosedive in the wake of last summer’s Brexit vote.
“EasyJet has finished the year with continued positive momentum delivering both a strong final quarter and a strong second half,” said Ms McCall. “Passenger numbers and load factor in the final quarter set new records.
“The market continues to be challenging and easyJet has had to absorb a significant currency impact of £100 million in the year.”
EasyJet is expected to be one of the beneficiaries of RyanAir’s decision to cancel 18,000 flights between November and March; and the collapse earlier this week of Monarch Airlines.
George Salmon, equity analyst at Hargreaves Lansdown noted that in spite of the demise of Alitalia and Air Berlin in addition to Monarch, easyJet is still expecting market capacity growth to be a headwind.
easyJet said it plans to grow capacity by around six per cent for the financial year ending 30 September 2018 but while revenue momentum continues to improve, yield pressure reflecting that capacity growth is currently forecast to be around five per cent in the first quarter.
“The demise of Alitalia, Air Berlin and Monarch has relieved some of the over-capacity issues in the sector, and while Michael O’Leary may now have extended an olive branch to pilots in the form of better conditions and pay, the disruption at Ryanair has gifted easyJet an opportunity,” he said.
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