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Easyjet expects healthy profit despite £100m hit from weak pound

PUBLISHED: 09:41 06 October 2017

File photo of an easyJet plane. Photo: Barry Batchelor/PA Wire

File photo of an easyJet plane. Photo: Barry Batchelor/PA Wire

PA Wire/Press Association Images

Budget airline Eastjet has warned it will take a £100m hammering from the Brexit-induced collapse of the pound – but still expects full-year profits to come in at the top end of its forecasts.

The company had a record quarter in the three months to September 30, carrying 24.1 million passengers as travellers lapped up low summer fares to beach destinations.

As a result Easyjet said full-year pre-tax profits are expected to come in at the upper end of its previously guided range – between £405m and £410m.

However, the range is still well below last year’s £495m profit, with the firm booking a £100m hit from the plunging pound.

Chief executive Carolyn McCall, who will leave the company to take the top job at ITV in January, said the market “continues to be challenging.

“Easyjet has finished the year with continued positive momentum delivering both a strong final quarter and a strong second half. Passenger numbers and load factor in the final quarter set new records,” she said.

“Easyjet continues to operate Europe’s strongest network and the current turmoil in the sector provides Easyjet with opportunities to capitalise on its strong customer proposition and grow and strengthen our positions in Europe’s leading airports still further.”

The firm has been helped in recent weeks by a shambolic showing from rival Ryanair, which has had to cancel hundreds of flights after miscalculating pilot leave, and the collapse of fellow budget carrier Monarch.

The firm has also been boosted by a lower fuel bill, which is expected to decrease by between £230m and £235m compared to last year.

Ms McCall leaves the low-cost carrier with Brexit storm clouds gathering over the travel industry.

The pound’s collapse has meant fewer people travelling overseas and, more starkly, British airlines are at risk of being grounded unless Tory ministers strike an aviation deal with the EU before March 2019.

To mitigate the impact, Easyjet confirmed earlier this year that it has applied for a new air operator’s certificate (AOC) in Austria to allow it to continue flying in the European Union after Britain’s divorce from the bloc.

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