EasyJet warns of an­nual prof­its slump

The Sun (Malaysia) - - SUNBIZ -

LON­DON: Bri­tish low cost air­line EasyJet warned yes­ter­day that an­nual prof­its would slump by al­most a third, hit by a Brexit-driven tum­ble in the pound, ter­ror at­tacks and in­dus­trial ac­tion.

EasyJet fore­cast an­nual pre-tax prof­its would dive by about 28% to be­tween £490 mil­lion and £495 mil­lion (RM2.1 bil­lion and RM2.6 bil­lion).

“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 chief ex­ec­u­tive Carolyn McCall in a trad­ing up­date.

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.

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

The 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 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, ramp­ing up the cost of run­ning air­craft.

EasyJet will pub­lish its an­nual re­sults on Nov 15 for the group’s fis­cal year, which runs to Sept 30. – AFP

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