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Wizz Air halves UK expansion plans after pound's Brexit vote plunge

Published 20/07/2016

Wizz Air said the UK's vote to leave the EU had led to a 'notable' drop in fares on routes to and from Britain
Wizz Air said the UK's vote to leave the EU had led to a 'notable' drop in fares on routes to and from Britain

Budget airline Wizz Air became the latest firm to reveal a blow from the Brexit-hit pound as it cut plans to expand flights from Britain.

The Eastern and Central European carrier, which is listed in London, had aimed to boost its routes from the UK with more services, but said it would now halve these growth plans due to the recent plunge in the value of the pound.

It said the UK's vote to leave the EU had already led to a "notable" drop in fares on routes to and from Britain - when converted into euros - as a result of the weak pound.

Sterling slumped to 31-year lows against the US dollar and tumbled against the euro after the UK's vote to leave the EU, although it has since regained some ground.

Wizz Air's woes come as Channel Tunnel operator Eurotunnel also revealed a hit from the pound, warning over earnings this year and next after sterling's fall since the Brexit vote.

The group - which carries train services between London, Paris and Brussels - cut its outlook for underlying earnings by 25 million euros (£21 million) in 2016 and 26 million euros (£22 million) next year after the pound's drop in value against the euro.

Wizz Air had planned to grow its UK business by 30%, which would be equivalent to four extra planes in this financial year, but said it would reduce this to 15% as a result of sterling's weakness against the euro, instead redeploying the extra planes to other countries.

But the group said it remained confident of meeting full-year forecasts for net profit of between 245 million euros (£205 million) and 255 million euros (£213 million).

Airlines have been hit hard by the Brexit vote, with easyJet and British Airways-owner International Airlines Group (IAG) warning over profits following the referendum result.

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