BREAKING NEWS

BREAKING NEWS

EasyJet lifts profit forecast as rivals falter

Now Reading:

EasyJet lifts profit forecast as rivals falter

EasyJet lifts profit forecast as rivals falter
Text size Aa Aa

By Sarah Young

LONDON (Reuters) - British low cost airline easyJet <EZJ.L> raised its profit guidance on Wednesday, forecasting earnings could soar by as much as 45 percent this year as it benefits from the collapse of rivals last year and strikes at competitor Air France <AIRF.PA>.

EasyJet, which is Europe's second-largest budget airline behind Ryanair <RYA.I>, predicted pretax profit for the 12 months to the end of September in a range of 550 million pounds to 590 million pounds.

Shares in the company climbed 4 percent in early trade, making them among the top gainers on Britain's blue-chip index.

EasyJet called the competitive environment benign, saying it was continuing to benefit from the failure of smaller British rival Monarch last year and that it had picked up passengers from Air France, which has cancelled flights due to strikes.

The profit forecast, an upgrade to the 530-580 million pound estimate provided in May, came as strong demand for holidays helped easyJet shrug off the cost of a jump in flight cancellations during its fiscal third quarter.

Air traffic control restrictions, industrial action, and severe weather meant easyJet cancelled 2,606 flights in the quarter, up from 314 in the same period last year.

Costs from the disruption were 25 million pounds higher than in the same quarter a year earlier, the airline said.

Despite the problems, easyJet said there had been strong demand across its markets.

"It’s a situation where we’re doing well in terms of all the market," CEO Johan Lundgren told reporters on a conference call.

The CEO was speaking as easyJet is set to receive the first of its Airbus <AIR.PA> A321neo planes, which have 235-seats, making it the airline's largest aircraft so far, 30 percent bigger than the A320 jets it also flies.

The new planes will save on costs and fly popular routes between London Gatwick and tourist destinations in Spain such as Palma and Malaga.

Britain is due to leave the European Union in less than nine months, but Lundgren said he was confident easyJet could keep flying whatever sort of deal the UK strikes with the bloc.

"I'm still very convinced there will not be any disruption of flying post Brexit. Even the (European) Commission has said that in case of hard Brexit, they will implement a bare-bones agreement that will ensure continued connectivity," he said.

EasyJet also said it would make more losses than previously expected at Berlin Tegel airport this year, where it has expanded rapidly following the acquisition of parts of insolvent Air Berlin. It now predicts those losses this year at 125 million pounds against a previous forecast of 95 million.

(Additional reporting by Victoria Bryan; Editing by Victoria Bryan and Mark Potter)

euronews provides breaking news articles from reuters as a service to its readers, but does not edit the articles it publishes. Articles appear on euronews.com for a limited time.