 profits were dented by the pound devaluation, costing the company around £105 million it has announced.){kind=link}
The pound’s recent devaluation has put a dent in Easyjet’s (LON:EZJ) profits, costing the company around £105 million.
UK-based Easyjet is in the process of relocating a portion of its operations to Europe, amid concerns over the impact of Brexit. According to an update on Tuesday, the airline’s revenues have taken a hit as a result of the pound’s rapid devaluation in the wake of the June referendum result. The pound has fallen by 17 percent against the dollar since June, and continues to be turbulent.
Despite the impact on profits, the budget airline did announce “solid” trading figures for the final quarter of 2016. Across the period there was an 8.3 percent increase in passenger volume to 17.4 million. However without considering the impact of the pound devaluation, seat revenue fell by 1.2 percent to £51.64 each.
Easyjet’s chief executive, Caroline McCall, said: “Easyjet has delivered a solid first quarter with revenue, cost and passenger numbers in line with expectation. This is despite tough pricing and operating environment.”
The company’s mainland Europe move is anticipated to cost around £10 million, with the company labelling it a “cost-saving exercise” which ultimately will lead to “simpler, more efficient organisation”. Its London Luton headquarters is to remain in operation, and it has ensured that no jobs will be lost as a consequence.
Currently under EU regulations airlines across Europe are party to the “open sky” arrangement, which ensures that any EU airline is permitted to fly without cost to any point within the continent. However as Britain prepares to leave the EU, the Luton-based airline is concerned that this may be jeopardised.
Easyjet has been in operation since 1995, and operates around 820 routes in more than 30 countries. As of 2015, the company have announced an intiative to recruit more women pilots under the ‘The Amy Johnson Flying Initiative’, with a target for the year of a 22 percent increase in female recruitment.
Shares in the airline were down 8.83 percent in early Tuesday morning trading, as of 09.28AM (GMT).