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November 2017

EasyJet takes £101m currency hit

Published: Thursday 23 November 2017

by Adrian Bishop

The nosedive in Sterling’s value caused by Brexit uncertainty contributed to a 17.3% fall in full-year pre-tax profits.

The falling Pound made US Dollar-priced fuel more expensive, which accounted for most of the reverse, according to the 2017 full year results statement.

However, strong cost control, driven by increasing benefits of scale and stronger network positions, helped offset inflationary pressures and produced headline profit before tax of £408 million.

This demonstrates the resilience of easyJet's business model, despite the adverse currency impact, says outgoing Chief Executive, Carolyn McCall, who announced her departure to ITV in July. 

"easyJet delivered a robust performance during a difficult year for the aviation industry, flying a record 80 million passengers," she says.

In total, profits after tax fell 30% year-on-year to £305million ($404million, €344million) in the 12 months to 30 September 2017.

In October, easyJet announced an agreement to acquire part of Air Berlin’s operations at Berlin Tegel airport for €40million, subject to antitrust and regulatory approvals. The acquisition, which is expected to close in December 2017, will result in easyJet entering into leases for up to 25 A320 aircraft, offering employment to up to 1,000 former Air Berlin crews and taking over other assets including slots. The purchase price excludes start-up and transitional operating costs

Add in encouraging revenue trends and the outlook for 2018 is positive. “easyJet will continue its strategy of purposeful investment to drive profitable growth to secure leading positions at primary airports, increasing returns over the long-term. easyJet plans to grow capacity by around 6% for the 2018 financial year, excluding any prospective Air Berlin capacity.

“Forward bookings are ahead of last year at 88% for the first quarter and 26% for the second quarter.”