EasyJet lifts profit forecast after Air France strike

EasyJet lifts profit forecast after Air France strikeEasyJet today lifted its annual profit forecast to as much as £580 million after gaining from last month’s lengthy strike by Air France pilots.

The UK budget carrier said the dispute is expected to have increased its revenue by about £5 million as Air France passengers switched airlines.

“This combined with the strong finish to the year means that the board’s expectation is for a pre-tax profit for the twelve months ended September 30 of between £575 million and £580 million compared with the previous guidance of £545 million to £570 million.”

EasyJet expects to declare a dividend based on a pay-out ratio of 40% of profit after tax.

The carrier also gained £2 million in the six months to September from lower fuel costs and £15 million from exchange rate movements.

The overall fuel bill is expected to drop by a further £20 million in the six months to March 2015 and £50 million for the next full financial year.

However, exchange rate movements are likely to have around a £20 million adverse impact compared to the 12 months to September this year.

More than a quarter of seats for the first half of the next financial year have now been sold, slightly ahead of the same period this year.

Chief executive Carolyn McCall said in a pre-close trading update: “EasyJet has continued to execute its strategy, delivering another strong performance in the second half of the year.

“This has enabled easyJet to deliver record profits for the fourth year in a row.

“This will also lead to our largest ever ordinary dividend payment as we are also proposing to increase the proportion of our profits after tax paid in dividends from 33% to 40%.

“We finished the year strongly.  Our performance demonstrates our continued focus on cost and progress against all our strategic revenue priorities and further emphasises easyJet’s structural advantage against both legacy and low-cost competition.”

The airline’s full year results are due to be published on November 18.

Sourced from Travel Weekly

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