EasyJet warns of annual profits slump
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