Budget carrier EasyJet expects the weakness in UK currency to have a £105 million ($131 million) impact on pre-tax profit for the current financial year.
The airline says this weakness, plus the consideration of fuel costs, have resulted in a financial effect over the quarter which was £35 million worse than predicted.
But EasyJet says it has made "good progress" in mitigating this through cost control, achieving £14 million in savings through maintenance and airport expenditure, and benefiting from increasing the size of its aircraft.
The airline has turned in a “solid” first-quarter performance, it states, with figures “in line with expectations”.
Revenues for the three months to 31 December 2016 rose by 7.2% to £997 million, although revenue-per-seat was down by 8.2% at constant currency.
EasyJet’s cost-per-seat, at constant currency, improved by 2.1%. The airline attributes this to low fuel prices but adds that, excluding fuel, the figure increased by 1.1%, consistent with expectations.
Over the full year, it says, cost-per-seat excluding fuel will rise by around 1%, and to decrease by 3% when fuel is taken into account.
EasyJet intends to increase capacity over the first half by 9%, and maintain this rate of increase over the full year.
First-half revenues-per-seat will be affected by the late Easter holiday period, but the decline will stay “within the range of previous guidance”, the airline says, and it expects the second-quarter revenue-per-seat decline to improve compared with the first quarter.
EasyJet is continuing to work on establishing an air operator's certificate in another European Union state, and says it spent £400,000 on this effort in the quarter.
It expects the overall cost of this strategy will total £10 million over two years, including £5 million in the current financial year, largely as a result of aircraft re-registration. The AOC will secure flying rights of the intra-EU operation, excluding the UK, some 30% of the airline's network.
Source: Cirium Dashboard
