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Strong second half lifts EasyJet full-year profits

UK budget carrier EasyJet is predicting a full-year pre-tax profit of £405-410 million ($530-536 million), at the higher end of its previous estimates.

The airline, whose financial year ended on 30 September, states that it expects to achieve the figure despite a £100 million adverse impact from exchange-rate effects.

Its pre-tax profit estimate amounts to a substantial decline on the previous level of £495 million – although the carrier says its second-half profit was over £100 million higher than last year.

EasyJet has benefited from a £230-235 million fall in fuel expenditure.

Headline cost-per-seat, at constant currency, will fall by 4.4% as a result, although – with fuel excluded – the figure will rise by 1%. EasyJet says this is "in line" with earlier guidance.

The airline recorded a reduction in revenue-per-seat, at constant currency, of 3.7% in the fourth quarter and 1.4% in the second half.

But it says this performance is, nevertheless, "slightly better" than previously expected, as a result of high load factors and "strong" ancillary revenues.

Over the fourth quarter the airline expanded capacity by 8%. It is planning to raise capacity by 6% over the 2017-18 financial year.

"We expect continued pressure on yields reflecting ongoing market capacity growth," it adds, putting this growth estimate at 5% for the current first quarter.

EasyJet is forecasting a £125-145 million benefit on fuel expenditure during the next 12 months, and a negative foreign-exchange effect of £20 million.

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