EasyJet takes a £200m hit from terror and fuel costs

SHARES in EasyJet tumbled yesterday after the company said annual profits would be around £200m lower than last year.

The airline has missed out on at least £125m of profits from terror attacks in Europe, Egypt and Tunisia, as well as air traffic control strikes in France and political turmoil in Turkey.

Atrocities at popular travel destinations such as Brussels, Paris, Nice and Sharm el-Sheikh have also deterred holidaymakers.

The company added that the slump in the pound since the Brexit vote – sterling hit 31-year lows against the dollar and fiveyear lows against the euro this week – has cost it a further £90m.

The weak pound has pushed up the cost of fuel, which it buys in dollars, and charges at European airports, which it mainly pays for in euros as well as Swiss francs.

EasyJet said it expects profits for the year to September 30 to be between £490m and £495m – well down on the previous year’s haul of £686m.

Passengers have benefited from tight cost controls with EasyJet fares down by around 9pc yearon-year amid a price war with rivals such as Ryanair. The company flew 22m passengers in the last three months – a record for this time of year.

EasyJet chief executive Dame Carolyn McCall said the carrier has been ‘disproportionately affected by extraordinary events’ this year.

She added: ‘The current environment is tough for all airlines, but history shows that at times like this the strongest airlines become stronger.’

Shares fell 69.5p to 933.5p – a slide of more than 6pc, taking the stock to its lowest level for threeand-a-half years. The shares have fallen nearly 40pc since the EU referendum and 50pc since their peak in April last year.

George Salmon, an equity analyst at Hargreaves Lansdown, said: ‘EasyJet is facing challenging times on a number of fronts and it’s one of the worst-performing stocks in the FTSE 100 since the EU referendum.

‘Other airlines are looking covetously at EasyJet’s market share, with pressure coming from both the budget players Wizz and Ryanair, and premium economy offerings like Vueling.’ STERLING has hit a fresh 31-year low against the US dollar as investors fretted over the prospect of a ‘hard Brexit’ following Britain’s vote to leave the European Union.

The pound fell to as low as $1.2623 at one stage and €1.13 against the single currency on another brutal day.

The slump follows Theresa May’s pledge this week to trigger Article 50 by March next year – paving the way for a so-called ‘hard Brexit’ that would pull the UK out of the single market as well as the EU. The rout in sterling this month – down more than 2.5pc against the dollar in October and 15pc since the EU referendum – has come despite more upbeat economic news.

Figures this week suggested the economy grew by 0.3pc in the third quarter, and the International Monetary Fund said the UK would be the fastest-growing nation in the G7 this year.

A report out today shows confidence among British businesses is back at pre-referendum levels, up to 112.4 last month from 109.7 in August.