The recent mass flight cancellation by Ryanair and collapse of Monarch have significantly reduced competition in the low-cost aviation sector. While EasyJet reported a rise in passengers of 9.7%, it saw a fall in pre-tax profits of 17.3% to £403m, this year until September 30th.
Why Are EasyJet Profits Down?
Yesterday morning, EasyJet’s share price jumped 4.36%, despite profits having taken a hit. The company said this was due to the pound’s devaluation.
Carolyn McCall, EasyJet’s CEO, stated that despite the company taking measures to protect itself against currency fluctuations, the Brexit referendum result caused momentous losses. This was, in particular, due to a weak pound increasing costs abroad.
A Path Ahead
While profits are down, EasyJet expects to recover over the winter period as passengers on cancelled Ryanair and Monarch routes buy tickets.
A report found EasyJet’s market share across Europe to be 8.3%, though a fall in competition is likely to see this figure rise.
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