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Business

Easyjet profit drops amid currency headwinds

No-frills British airline Easyjet has reported a hefty drop in pre-tax earnings for the business year ending September 30. It took a hit from the slumping British pound as the UK prepared for its exit from the EU.

British low-cost airline Easyjet on Tuesday sais its annual profit before tax slumped by almost one-third, owing to a Brexit-driven tumble in sterling, the fear of terror attacks and strikes.

Operating earnings dropped by 28 percent to 495 million pounds ($618 million, 574 million euros) in the year to September 30, compared with the 2014-15 fiscal year.

The decrease in earnings came despite a record number of 73.1 million passengers flying Easyjet in the 12 months under review.

Weak pound a headache

Europe's No.2 budget airline after Ryanair thus posted its first decline in profits since 2009 as it struggled to mitigate the impact of Britain's vote to leave the European Union.

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The weak pound following the Brexit vote resulted in an 88-million-pound hit to Easyjet's profit in 2015-16, the carrier said Tuesday. It said it expected a further impact of 90 million pounds in the 12 months to September 2017.

"Easyjet achieved a resilient performance in 2016 in the face of significant challenges including a series of external events and foreign exchange headwinds," CEO Carolyn McCall said in the latest earnings report.

"Almost half of our growth next year will be in the UK, with significant growth also in Switzerland, France and Italy," she added.

hg/sgb (Reuters, AFP)

 

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