Easyjet to cut flights to save fuel
British budget airline easyJet said today full year pretax profit would fall to a worse-than-expected £110-120 million (€140 to €152.6 million) while it was cutting capacity for this winter.
Analysts had been expecting a drop to around £138 million for the year to September, according to Reuters estimates, from a pretax profit of £191 million last year.
The company said in a statement the high price of oil had added around £185 million to its fuel bill, which in turn had hit margins.
EasyJet said it had offset around 50 per cent of its fuel bill increase through cost cuts, while capacity for this winter would be cut by 4 to 6 per cent to reduce unprofitable flying, in line with rivals including Ryanair.
Third-quarter revenue was up 32 per cent to £641 million as it absorbed the acquisition of GB Airways, while revenue per seat was up 12 per cent in the same period.
"EasyJet's Q3 trading update was broadly reassuring for the current year and showed strong growth in volumes and revenues ... We view the move to cut capacity growth this winter as sensible," Credit Suisse analyst Gerald Khoo said in a note.
The shares, down nearly 40 per cent in the year to date, closed yesterday at 369.25 pence, valuing the airline at around £1.5 billion.