EasyJet annual profit hit by slumping pound

British low-cost airline EasyJet, currently with direct flights from Luxembourg to UK, France, Italy and Portugal, warned Tuesday it faced further financial turbulence from a Brexit-driven slump in the pound after terror attacks and labour disputes took their toll on annual profits.

Pre-tax profit tumbled by 28 percent to 574 million euros in the year to September 30 compared with 2014-15 “mainly due to the decline in revenue and foreign exchange impact”, EasyJet said in an earnings statement.

It added that currency fluctuations would cost it around £90 million during the current financial year, with £70 million in the first half. EasyJet said it planned cost savings but gave no firm details.

“EasyJet achieved a resilient performance in 2016, in the face of significant challenges including a series of external events and foreign exchange headwinds,” group chief executive Carolyn McCall said in the statement.

EasyJet has also been hit over the past year by industrial action and unrest in key markets Egypt and Turkey.

Markets had expected the latest financial results after EasyJet posted a profit warning in October.

In morning deals Tuesday, its share price was up 1.55 percent on London’s rising benchmark FTSE 100 index.

The pound has meanwhile tumbled following Britain’s shock June 23 vote in favour of leaving the European Union, striking 31-year dollar lows and 7.5-year troughs against the euro.

The collapsing value of the pound weighs on EasyJet’s performance because it makes dollar-priced jet fuel more expensive, ramping up the cost of running aircraft.

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