Low-price beach holiday offers helped Easyjet attract record passenger numbers for the summer but it warned of more turbulence ahead as it battles rivals in the cut-throat aviation market.
The budget carrier said it was on course to post headline annual profits of £405-£410m, at the upper end of its previous guidance though lower than last year’s £495m.
Chief executive Carolyn McCall said conditions remained “challenging” and it expected more pressure on yields – a key measure of airlines’ financial performance – as it battles rivals.
The airline’s fourth quarter trading update also revealed a £100m hit to profits for the year from the fall in the pound since the Brexit vote – an issue that the group had previously flagged.
Shares were nearly 3% lower in mid-morning trading.
Easyjet said it flew a record 24.1 million passengers in the three months to the end of September with load factor – a measure of how full its planes are – at a record high of 95.6%.
The group said: “Passengers have benefitted from low summer fares across the network, particularly on beach markets from the UK.”
This came at a cost to the airline, with revenue per seat down 3.7% – after stripping out currency changes – in the fourth quarter, though this was slightly better than had been expected.
The challenges facing the aviation market were highlighted in the collapse earlier this week of the UK’s fifth biggest airline Monarch, Alitalia and Air Berlin have also gone under.
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Airlines are facing a fierce battle for survival in what is widely acknowledged to be an overcrowded marketplace for flights.
Easyjet said it saw the current market environment as “an opportunity to build and strengthen its network and customer proposition for the long term”.
It added: “Whilst revenue momentum continues to improve, we expect continued pressure on yields reflecting ongoing market capacity growth.”
Full year results will be published on 21 November.
Source: SKY News Feed