EasyJet upgrades profit forecast

Low-cost airline EasyJet has lifted profit expectations for its traditionally weaker first half but warned it could be buffeted by volatile exchange rates and oil prices in coming months.

The group said it expected its pre-tax result for the six months to March 31 somewhere between a loss of £5m (€6.8m) and profit of £10m.

It offered a glimmer of hope its performance over the winter period would be in the black. The airline had previously forecast a first half loss of between £10m and £30m. A year ago it posted a £53m loss for the same period.

The airline said the impact of exchange rate movements would boost its bottom line by £20m for the half but result in a £40m hit in the second half.

Chief executive Carolyn McCall said the airline “has performed well in the first half of the year and has continued to deliver its strategy of making travel easy and affordable for passengers”.

“We continue to expect that lower fuel costs will be beneficial for our customers as fares adjust,” she added.

But the airline warned that “further volatility around currency rates and the oil price is likely to continue into the second half”.

This volatility was highlighted when military action in the Middle East yesterday saw the price of a barrel of Brent crude surge close to $60, sending EasyJet’s shares 5% lower.

Richard Hunter, of Hargreaves Lansdown stockbrokers, said EasyJet “continues to be a compelling proposition for both customers and investors alike, with an improved profit guidance figure providing some solace in the currently volatile environment”.