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EasyJet well positioned after posting winter-season profit
[LONDON] British low cost airline easyJet said it was positioned to continue to grow in this financial year after it turned a profit in the weaker winter season for the first time, although it warned it would take a hit from air traffic strikes in April.
easyJet forecast growth in revenue and profit for the 12 months which end in September, as forward bookings progressed in line with last year and as the cost of its fuel bill shrinks by up to 120 million pounds due to lower oil prices.
Its second half result would, however, be impacted by disruption in April which would trim 25 million pounds from pretax profit, easyJet said, blaming air traffic control strikes in France which meant 600 flights were cancelled.
The disruption plus the timing of the Easter holiday period and a one percentage point reduction in underlying trading meant the company expected third-quarter revenue to be down around 4 percentage points, excluding the impact of currency moves.
For the six months ended March 31, the group, which like other European airlines has historically made a loss over the winter when fewer customers fly, reported pretax profit of 7 million pounds (US$11 million).
That came in at the upper end of its forecast for between a loss of 5 million pounds and a profit of 10 million pounds, and compared to a loss of 53 million pounds in the year earlier period.
easyJet said a lower fuel price and favourable currency movements as well as a strong finish to the ski season helped it make a profit in the first-half.
The company, Europe's No 2 low-cost carrier behind Ryanair , said it was confident that its fares would be competitive against rival operators, allowing it to continue to grow.
Ryanair in February said that profits would only rise modestly in the year ahead as low oil prices help rivals to cut fares.