EasyJet expects bigger earnings hit from weak pound

EasyJet expects full-year profits to suffer a bigger-than-expected hit with the pound down sharply since the Britain voted to exit the European Union, the low-cost airline said Tuesday.

"The weakness of sterling is expected to impact EasyJet's year-on-year profit before tax for financial year 2017 by around £105 million ($131 million, 122 million euros)," the company said in a statement, up from an estimate of about £90 million in November.

Since Britain voted in June for Brexit, the pound's value has slumped by around 18 percent against the dollar and some 14 percent versus the euro.

Tuesday's update meanwhile came in a first-quarter trading statement in which EasyJet announced rises to revenue thanks to higher passenger numbers.

"EasyJet has delivered a solid first quarter with revenue, cost and passenger numbers in line with expectations," said chief executive Carolyn McCall.

EasyJet earlier this month said it had transported a record 74.5 million passengers last year thanks to low oil prices and full planes, but nevertheless found itself slipping further behind no-frills leader Ryanair.

And EasyJet's heavy exposure to the uncertain British economy and weak pound have seen investors shun the airline's shares, which fell 42 percent last year, a drop much worse than its rivals.

EasyJet has been hit also by industrial action and unrest in key markets Egypt and Turkey.

Meanwhile following Britain's vote to quit the EU, EasyJet is looking into obtaining EU operating certification to ensure a smooth transition once the country does leave the bloc.

bcp/spm