EasyJet warns profits will be down

EasyJet has warned the weak pound will cost it £90 million in its current financial year and has revised its profit forecast.

The figure is more than double the £40 million estimate it made in July.

The airline anticipates a profit of between £490 million and £495 million for the financial year to September 30, down 28% on the £686 million annual profit it made in 2015.

EasyJet chief executive Carolyn McCall said: "EasyJet continues to attract record numbers of passengers due to its wide range of destinations, convenient flight times and value for money fares.

"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.

"The current environment is tough for all airlines, but history shows that at times like this the strongest airlines become stronger.

"That is why we will continue to invest for the long term success of the business, establishing even stronger market positions, delivering excellent customer service and establishing new revenue opportunities for the future."

The airline flew a record 22 million passengers in the three months to 30 September. Ticket prices have been lower and easyJet says they are likely to fall further.

David Cheetham, market analyst at XTB.com, said it was not all ‘doom and gloom’.

"Despite the latest trading update for the three months to 30 September 2016 showing record passenger numbers for easyJet it has been a challenging quarter for the low-cost airline," he said.

"Major external shocks such as the Brexit vote and terror attacks have weighed on performance and the high number of passengers has only been achieved by slashing prices with a 8.7% drop in revenue per seat compared to the same period last year.

"The outlook going forward has also been revised downward in a development that may be a cause for concern amongst investors who have seen the share price decline by almost half in the past year.

"Another adverse factor affecting the firm has been the drop in the pound with exchange rate movements now forecast to wipe £55 million off the company’s bottom line – £10 million more than was previously forecast.

"However its not all doom and gloom for the stock going forward and shareholders may take solace in the fact that despite the exogenous shocks the budget airline has still delivered impressive growth."

Yesterday easyJet put its spring flights on sale for 2017 with a record number of flights and routes.

In total, 138,780 additional flights are set to take flight across easyJet’s network between March 26 and June 27 next year.

In the UK, there are more than 16.1 million additional seats now on sale on just over 94,870 flights.