Favorable moves in currency exchange rates mean that UK-based low-cost carrier (LCC) easyJet will turn in a better-than-predicted financial performance for the first half of 2015, the carrier said Thursday.
In a financial update statement, easyJet said its estimated first-half results would improve from a loss of between £10-£30 million ($15 to $45 million) predicted on Jan. 27 to somewhere between a loss of £5 million and profit of £10 million.
The airline traditionally makes a loss in the first half of its financial year, which covers the winter period.
The predicted the improvement in first-half figures is “primarily due to the movement of exchange rates in the second quarter,” mainly because of a weakening of the euro against sterling. However, that position is likely to reverse in the second half, which will result in an adverse impact of £20 million for the year ending Sept. 30.
“EasyJet has performed well in the first half of the year,” CEO Carolyn McCall said. “We continue to expect that lower fuel costs will be beneficial for our customers as fares adjust.”
The carrier’s fuel bill for the six months to March 31 will improve by around £35 million compared to the year-ago period, the airline said. For the full year to Sept. 30, its fuel costs are likely to show an improvement of £90-£120 million compared to the previous year.
Revenue per seat at constant currency for the six months to March 31 is expected to be around 2.5% better than the year-ago period, while costs per seat for the same period increased by up to 3% year-over-year due to higher levels of de-icing and disruption costs in the second quarter. The latter figure does not include an additional navigation charge from Eurocontrol, which easyJet is currently disputing.
Bookings for the second half of the year are in line with last year. However, further volatility around currency rates and the oil prices is likely to continue into the second half.