EasyJet reports half year loss due to weak sterling

Owen Stevens
May 16, 2017

EasyJet's revenue grew 3.2 per cent to £1.8bn and it flew a record 33.8 million passengers in the six months, up nine per cent from a year before. Bookings are running ahead of previous year with 77 percent of seats sold for the current three months, while competitors are reining in capacity, easing a supply glut.

"Cost performance for the full year will continue to be strong", she added.

Excluding these two items the headline loss before tax would have been circa £85 million.

EasyJet has reported a larger loss for the the first half of its financial year, partly due to the impact of the lower pound and the timing of Easter.

Even so, investors were not impressed with the results, sending the airline's shares down almost 6% in early trading.

She also said it was usual for travel firms and airlines to make losses in the first half of the year covering the winter season, with profits concentrated into the second half, which includes the peak summer season.

Chief executive Carolyn McCall said: "Easyjet delivered a resilient performance during the winter months".

The budget airline said unfavourable currency movements resulted in an impact worth £82m, while the timing of Easter, which was moved into the second half of the company's financial year, cost the carrier £45m.

The carrier reported a headline loss before tax of £212m, compared with £21m a year earlier.

Another positive piece of news from the update, according to Forrest, was the company's headway in securing a European Air Operator certificate to address post-Brexit concerns.

Adding the A321neos will boost the number of seats per flight, McCall said, improving unit costs by as much as 9 per cent versus the biggest planes easyJet now operates and maximising growth at slot-constrained hubs such as London Gatwick.

EasyJet said it was on track to secure an Air Operator Certificate in another European Union member state during the summer in order to secure flying rights for its non-UK routes, which the company expects will cost it £10 million in the next three years.

Despite the loss, EasyJet is maintaining its full-year expectations. It needs this to make sure that it can still operate between European Union member countries after the United Kingdom leaves the EU.

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