EasyJet forecasts annual profit growth of at least 14%

Low-cost airline EasyJet said it would grow annual profit by at least 14 per cent assuming no further significant disruption over the next two months, putting it on track to meet analyst expectations.

The company forecast that pre-tax profits for the 12 months to the end of September would be in the range of £545 million to £570 million and the range included the impact from situations in Israel, Egypt and Moscow.

The airline's low fare model has helped it and low-cost rival Ryanair weather the impact of an increasingly competitive European shorthaul market, while higher cost carriers have struggled.

Air France-KLM, Europe's second-largest traditional network carrier warned earlier this month that its 2014 profit could be as much as 12 per cent lower than previously predicted, mainly due to overcapacity and resulting weak prices.

Lufthansa last month cut back its profit targets for the next two years, citing competition with low-cost rivals as one of the factors.

EasyJet was one of a number of airlines which on Wednesday suspended flights to Tel Aviv’s Ben Gurion Airport after it was targeted by Palestinian rockets. Flights were also suspended on Thursday and the airline said it was reviewing its operations in the country on a day by day basis.

Calling its third quarter performance solid, EasyJet said it grew revenue by 8.6 per cent to £1.2 billion in the period, having added capacity of 6.8 per cent.

It said cost per seat, excluding fuel and currency movements, was 1.3 per cent lower than the year earlier period, beating earlier guidance of a 2 per cent rise for the second half of the year.

Shares in easyJet, which have fallen 17 per cent over the last three months, closed at 1,403 pence on Wednesday.

Reuters