Easyjet's first-half guidance ascends on favourable FX

LONDON (ShareCast) - Budget airline Easyjet (Other OTC: ESYJY - news) expects to beat previous first-half guidance, mainly due to favourable foreign exchange movements in the second quarter. The group now anticipates a positive £20m impact from FX for the six months to 31 March, compared with £10m at the time of its last guidance given in January.

As such, the revenue-per-seat growth forecast has been boosted from 2% to 2.5% at constant currency.

However at the same time, guidance for cost-per-seat growth excluding fuel has also increased from 2.5% to 3.0% due to higher levels of de-icing and disruption costs in the second quarter.

The company's revised outlook also pencilled in a wide range between a loss of £5m to a profit of £10m for the first half, compared with previous estimates of a £10m-30m loss. The year before, it recorded a pre-tax loss of £53m.

"Easyjet has performed well in the first half of the year and has continued to deliver its strategy of making travel easy and affordable for passengers," said chief executive Carolyn McCall.

"We continue to expect that lower fuel costs will be beneficial for our customers as fares adjust." Looking ahead, the first-half favourable impact from FX is expected to reverse in the second half, leading to a £40m adverse impact. However, the net £20m adverse impact for the full year ending September was in line with previous guidance.