easyJet warns of ‘tough’ outlook
16.09.08
easyJet said today the strength of the euro and a worsening consumer environment in the UK would slow the strong growth in revenue per seat it had achieved over the summer. The airline added that the market was too volatile to forecast the impact on yields of expected capacity cuts of 2 - 4 percent industry-wide over the winter.
In a statement to the stock market easyJet reiterated that its pre-tax profits for the year would be down by some 40 percent at £110m - £120m, excluding £12m of one-off costs relating to the acquisition of GB Airways. The airline expects to have cash reserves of £900m at the end of this month.
Revenue per seat has risen by around 15 percent in the second half of the current financial year, but faced with high fuel costs, adverse currency movements and a worsening economic climate, easyJet will only increase the number of seats it offers over the winter by a modest amount, as it tries to defend margins.
For the next financial year, easyJet said it had hedged 48 percent of its fuel requirements at $1,225 a tonne, a sharp increase from the 28 percent it had hedged by late July, and at a slightly lower price. It has also hedged 70 percent of its dollar requirement and 80 percent of its anticipated euro surplus.
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