EasyJet set for low-flying results as sterling slump post-Brexit packs a punch
Another week, another airline braced for its results to take a hit thanks to the summer slump in sterling.
EasyJet's due to unveil its full-year results on Tuesday and investors are expecting a sharp drop in profits after the fall in value of the pound and terrorist attacks at some of its key holiday destinations.
The airline issued a profit warning last month, saying it expects to make between £490m and £495m for the year; almost a third less than the £686m it made last year.
Read more: easyJet and Norwegian passenger numbers soared for October
Citi now expects profit before tax of £491m (lowering its earlier forecast of £523m) and said it felt the airline was prepared to risk next year's earnings "in order to build market share in its key airports".
Terrorist attacks across Paris, Nice, Brussels and Sharm el-Sheikh cost the airline £125m in the first nine months of the year alone in lost business. And the aftermath of the Brexit vote sending the pound plummeting, wiped a third from the airline's market value. The budget carrier has since cut prices of tickets to keep a hold of market share.
Since the EU referendum in June, easyJet's share price has dropped by more than 30 per cent.
More than 6.8m passengers travelled with easyJet in October, up 6.9 per cent on last year. Rolling traffic for the past 12 months was also up, rising 6.3 per cent to 73.6m.
Read more: Monarch has cancelled all UK flights to Sharm el-Sheikh
Rival Ryanair's traffic for the month was up 13 per cent to 10.9m. While chief executive Michael O'Leary has been very vocal of the "difficult market conditions" for airlines post-Brexit vote, Ryanair reported an increase in profits during the first half of 2016.
But it expects revenues from fares to fall in the second half of the financial year (by 13-15 per cent) as the airline cuts fares to encourage more people to travel.