Weak pound and terror attack hit easyJet
LOW COST airline easyJet has taken another £35m hit as it takes a hammering from the weak pound, while it also outlined the impact of last month’s Christmas market attack in Berlin.
The budget carrier said the weak pound will cost it around £105m over its 2016/17 financial year, up from the £90m estimated in November, with fuel expenses also falling by less than expected.
The group added on top of the extra £35m fuel and pound bill, it also saw a financial impact in the “low millions” from the deadly truck attack in Berlin, which killed 12 people on December 19, as bookings to the city dropped in the immediate aftermath.
It is also paying £10m for an air operation certificate as it sets up a new operating company in mainland Europe and applies for a new licence to secure flying rights of 30 per cent of its routes after Brexit.
The airline said revenues per seat fell 8.2 per cent as it continued to slash prices in the face of competition from the likes of rival Ryanair, but the group said this marked an improvement. It is cutting costs across the group to weather the difficult trading from the weak pound and increased competition.
CEO Carolyn McCall said the airline delivered a “solid” first quarter to December 31 in the face of “tough” conditions.
“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,” she added.
It said it carried 8.2 per cent more passengers in the Christmas quarter, at 17.4 million. It said that 56 per cent of expected bookings for the second quarter have now been secured.
EasyJet has made good progress in reducing costs. Carolyn McCall, chief executive of easyJet