Brexit pound slump expected to cost easyJet £105m in 2017

Carolyn McCall, the chief executive of easyJet, has said the cost of Brexit for her company would likely hit £105m this year, as a result of the slide in the value of the pound since the UK voted to leave the EU in June.

The budget airline pays for fuel in dollars, which makes it more expensive when the pound is weaker.

easyJet said a weak pound and the impact of fuel combined are £35m worse than previously expected. This means the company’s 2017 profit will take a larger-than-expected £105m hit. The company had previously warned of lower profits due to the fall in the currency.

However, easyJet said the underlying business was doing well, with first-quarter revenue, cost and passenger numbers in-line with its expectations.

Total revenue in the quarter increased by 7.2 per cent to £997m, which easyJet said reflected the increase in passengers carried through the period.

Revenue per seat fell by 8.2 per cent at constant currency to £51.64 per seat, though it was better than the company has previously anticipated

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.

“The weakness of sterling and the impact of fuel combined are £35m 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.”

In November, the budget airline cut its dividend after profits fell 27 per cent off the back of the Brexit vote. It blamed “unprecedented external events” for the difficulties.