Budget airline easyJet has seen annual profits nosedive by 17% after taking a £101 million hit from the weak pound, but confirmed a boost from the demise of rivals and recent woes at Ryanair.
In her last set of results before taking on the top job at ITV, chief executive Carolyn McCall said it had been a “difficult” year for the industry as she posted headline pre-tax profits of £408 million, down from £494 million the previous year.
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The pound’s plunge since the Brexit vote took its toll on the carrier’s bottom line, while a price war also left revenues per seat falling 7.8% with currency changes stripped out.
But the blow to its profits was not as bad as first feared thanks to a record performance in the final three months after a shambolic showing from rival Ryanair, which has had to cancel hundreds of flights after miscalculating pilot leave.
The group also said trading so far in its new financial year has been “encouraging” thanks to last month’s collapse of Luton-based carrier Monarch, as well as the demise of Air Berlin and Alitalia’s administration.
Forward bookings are higher than a year earlier, at 88% for the first quarter and 26% up for the second quarter, while it now expects revenue per seat to grow by “low to mid-single digits” in the first half.
However, the group stressed the outlook for the second half of the year was “very limited”.
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It also cautioned over costs of its deal to buy up to 25 aircraft from now-defunct Air Berlin as well as recruit up to 1,000 staff from the group, with the operation in Berlin Tegel expected to make a headline loss of £60 million, plus around another £100 million in other one-off costs.
Ms McCall said: “EasyJet delivered a robust performance during a difficult year for the aviation industry.
“Our planned approach of achieving number one or two positions at Europe’s leading airports, friendly and efficient customer service and a continuous focus on sustainable cost control has put easyJet at a strategic advantage during a period when there have been bankruptcies and some airlines have struggled operationally.”