EasyJet faces a £100 million-plus hit from the slump in sterling in the 2017 financial year.
The UK’s largest budget carrier warned today that the weakness in sterling would impact its pre-tax profits this year by £105 million.
In a trading update issued today, the airline said: “The pricing and operating environment remains tough with fuel prices remaining low and continued strong growth in European short haul capacity impacting yields across the industry.”
EasyJet saw passenger numbers rise by 8.2% to 17.4 million in the three months to December 31 but revenue per seat fell by 8.2% to £48.01 year-on-year on a constant currency basis.
This came as total revenue rose by 7.2% to £997 million.
About 56% of expected bookings for the second quarter of the airline’s financial year have been secured, slightly ahead of the same time a year earlier
“At this time of the year visibility into the third quarter is limited but April is progressing well with the benefit of Easter,” the airline said.
Reviewing the three months to the end of December, chief executive 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.
“Consumer demand remains strong with passenger growth of 8.2%, revenue growth of 7.2% and headline cost per seat reduction, at constant currency, of over 2%.
“The weakness of sterling and the impact of fuel combined are £35 million 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.
“EasyJet continues to grow with purpose in our core markets with capacity growth of up to 9% across our network.
“Our focus has been to invest to deliver long term sustainable, profitable growth by strengthening our leading positions at Europe’s biggest and most popular airports.
“The underlying year-on-year revenue per seat trend continues to improve, supported by resilient demand across all our European markets. Forward bookings are ahead of last year.”