EasyJet racks up half-year losses after being hit by pound's collapse
Budget airline easyJet has racked up large half-year losses after being stung by the collapse in the value of the Brexit-hit pound and the later timing of Easter.
The low-cost carrier reported a £236 million pre-tax loss in the six months to March 31, which compares with an £18 million loss in the same period last year.
EasyJet said that the impact of the timing of Easter into the second half of the year stood at around £45 million while currency woes cost it £82 million in the period.
Chief executive Carolyn McCall said: "The first half loss is in line with market expectations and reflects the movement of Easter into the second half as well as currency effects which together had an estimated impact of circa £127 million on the bottom line."
However, Dame Carolyn added that summer bookings are ahead of last year and that demand for flights and holidays remains "strong", with consumers prioritising travel expenditure over "non-essential" items.
Despite the loss, easyJet is maintaining its full-year expectations.
Revenue grew 3.2% to £1.8 billion in the period, with the company recording a 9% rise in passengers to 33.8 million and a 0.5% increase in load factor to 90.2%.
The group is also in the midst of setting up a new operating company in mainland Europe and applying for a new licence to secure flying rights on continental routes after Brexit.
To this end, easyJet said it "remains on track" to secure a European Air Operator Certificate by the summer.
Dame Carolyn added: "Looking ahead, we are seeing an improving revenue per seat trend as well as the continued reduction of competitor capacity growth.
"Cost performance for the full year will continue to be strong, easyJet is delivering on its strategy of purposeful investment in securing and building strong positions at Europe's leading airports which is driving competitive advantage with sustainable returns."
Easyjet shares nosedived more than 5% in morning trading as investors digested the news.
Laith Khalaf, senior analyst at Hargreaves Lansdown, said: "While the airline is flying more passengers, it's making less money from each seat on its aircraft.
"The good news is UK holiday makers don't seem to have been put off travelling to Europe by the weaker pound, though they are currently enjoying a boon from lower fuel prices and a highly competitive short haul airline market.
"The vote to leave the EU and the associated fall in sterling have not been good for the airline's share price, which is currently languishing some 20% below where it stood before the referendum."