British airline easyJet warned its profit would fall by over 25 per cent this year as security issues dampened demand and low fuel prices meant there was more competition in the European short-haul market.
easyJet’s higher exposure to security-hit destinations in Egypt, Turkey and the French cities of Paris and Nice has meant the airline has fared worse this year than its bigger low-cost rival Ryanair.
For the year ended Sept. 30 2016, easyJet said that its profit would fall for the first time since 2009, coming in at between 490 million pounds and 495 million pounds ($629 million), compared to the 686 million pounds it made last year.
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The security issues have coincided with Britain’s vote to leave the EU, resulting in a devaluation of the pound which has cost easyJet around 90 million pounds over the period.
“We have been disproportionately affected by extraordinary events this year but our excellent network, cost control and revenue initiatives and our strong balance sheet underpin our confidence in the business,” easyJet Chief Executive Carolyn McCall said in a statement on Thursday.
Ryanair has stuck to its guidance for profit for the year to the end of March 2017 to climb 13 percent to between 1.38 billion euros ($1.55 billion) and 1.43 billion euros.
But both easyJet and Ryanair have been affected by falling fares as airlines across Europe have taken advantage of low fuel prices to up capacity, forcing carries to cut seat prices to compete.
easyJet’s revenue per seat fell 8.7 percent in its fourth quarter, a trend it sees continuing into the first quarter. Ryanair said in September that fares could fall by between 10 and 12 percent over the six months between September and March.