easyJet predicts 29% fall on pre-tax profit compared to 2015

Citing such external influences as terrorist attacks, Brexit and the weakening pound, easyJet, the low-cost UK-based carrier has forecast a £490-£495 million pre-tax profit for the carrier’s tax year ending September 30. This figure is down 29% on the last financial year’s profit of $686 million.
According to the airline: “EasyJet has performed strongly in a difficult operating environment for all European airlines and in the three-month period [to September] has been affected by major disruption, exchange rate fluctuations impacting holiday travel costs, the impact on demand from terrorist events and the low cost of fuel continuing to drive increased market capacity.”
Despite posting a 6.1% capacity addition in the three-months period up to September 30, and hitting a record 22 million passengers at a 93.9% load factor, at constant currency revenue per seat fell 8.7% compared to the same three months in 2015.
While easyJet benefitted from lower fuel prices, enabling it to shave between £75-£80 million off second-half yearly costs, predictions are that the weakened pound will see foreign exchange issues continue which, according to the carrier, means: “The total expected foreign exchange impact for the year to 30 September 2017 is around £90 million.”
For the 2017 financial year, easyJet plans to increase capacity by 8%, stating that “Revenue per seat in the first quarter continues to be down year-on-year and is currently expected to be broadly in line with the reduction seen in the fourth quarter 2016.”
The low-cost carrier also expects the costs for the 2017 financial year to increase by 1%: “This excludes the impact of a number of aircraft sale and leaseback transactions, plus the one-off costs associated with the set-up of a European air operator’s certificate and changes to the organizational structure, as well as the outcome of ongoing union negotiations.” (£1.00 = US$1.26 at time of publication)