Airline predicts rise in profits in face of disruption across Europe

easyJet

Budget airline easyJet said industrial action in Europe and poor weather is continuing to have an effect on its business.

The airline, which operates out of Liverpool and Manchester, said it will deliver a strong performance in the fourth quarter with customer demand driving outperformance.

The airline recently announced its biggest ever expansion at Manchester Airport.

Disruption across Europe continues to be an industry wide issue and is having an impact on revenue, cost and operational performance, with the main causes being European industrial action and air traffic restrictions.

The airline has seen improved performance in Tegel Airport in Berlin reducing the expected headline loss to around £115 million.

Despite the disruption, easyJet expects to deliver full year profits before tax of between £570 million and £580 million.

Passenger numbers for the full year excluding Tegel are expected to increase by 5.4% to circa 84.6 million, driven by an expected increase in capacity of 4.2% to circa 90.3 million seats which was lower than originally planned due to the level of external disruption.

Load factor for the full year is expected to increase by 1.0 percentage points to 93.6%.

Underlying cost control remains solid and in line with expectations as easyJet continues to deliver significant benefits from its cost programme.

The airline experienced an increase in cancellations compared to the third quarter of which the significant majority were due to third party industrial action, air traffic control restrictions or severe weather across Europe.

syJet expects to deliver a strong performance in both Q4 and the full year, driven by better-than-expected growth in passenger and ancillary revenues, as well as reduced losses at our Tegel operation.

“We now expect our headline profits for the year to be between £570m and £580m, at the top half of our guidance range.

“This has been achieved despite higher costs caused by disruption due to third party industrial action and severe weather. However, we have benefited from a number of one-off events in 2018, including the bankruptcies of Monarch and Air Berlin, as well as Ryanair cancellations.

The airline continues to have an industry leading balance sheet and expects a strong net cash position at the end of the 2018 financial year.

Johan Lundgren, easyJet chief executive, said: “ea

“In the fourth quarter we made the decision to change our approach to technology development. Rather than a full replacement of our core commercial platform, we will be investing in better utilisation and development of existing systems on a modular basis.  This has resulted in a non-headline charge of £65m as we repurpose our systems to create a better service for our customers.

“We look forward to 2019 as we continue to invest in the long-term strategic initiatives that we set out at the half year.”

 

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