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UPDATE 1-easyJet warns on Q3 profit, says Brexit clouds outlook

Mon, 27th Jun 2016 07:26

* Blames French strikes, congestion at Gatwick airport

* Sees 28 mln stg hit to Q3 profit

* Predicts consumer uncertainty following Brexit

* Shares down 9 pct (Adds detail, shares)

LONDON, June 27 (Reuters) - British budget airline easyJet warned on third-quarter profit on Monday, blaming thestrike action by French air traffic controllers, congestionissues at Gatwick airport and severe weather.

Europe's No.2 low-cost carrier also cautioned thatadditional economic and consumer uncertainty was likely thissummer following Britain's decision to leave the European Unionin Thursday's referendum.

Shares in the airline, which closed on Friday down 14percent after hitting a two-and-half-year low of 1,167 pence,were trading down 9.3 percent at 1,192 pence at 0724 GMT.

Cantor Fitzgerald analyst Robin Byde cut his 2015-16 pretaxprofit forecast by 14 percent to 633 million pounds followingthe update, and downgraded his recommendation to "hold" from"buy".

"We interpret this statement prudently particularly takinginto account the negative comments on the outlook for yields inH2," he said.

easyJet said the disruption in May and June, together withthe Egyptair tragedy, had resulted in 1,061 cancellations and adrop off in consumer demand, hitting third-quarter profit beforetax by about 28 million pounds ($37.5 million).

The airline is now forecasting that third-quarter revenueper seat at constant currency will fall by around 8.6 percentcompared to the 7 percent decline guided at its half yearresults in May.

easyJet said as a result of the uncertain outlook after theBrexit vote it expected revenue per seat at constant currency inthe second half to be down by at least a mid-single digitpercentage compared to the second half of 2015.

It said recent movements in fuel prices and exchange rateswere now expected to add around 25 million pounds of additionalcost in the year to that guided in May.

easyJet was already facing an increasingly competitivemarket as larger rival Ryanair and others add capacityand low fuel prices help all airlines to cut fares.

In May, easyJet had said it expected to meet analysts'average forecast for the 2015-16 year of 721 million pounds.

The firm said it will update on current trading when itpublishes third quarter results on July 21.($1 = 0.7470 pounds) (Reporting by James Davey, Editing by Paul Sandle)

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