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UPDATE 3-easyJet expects resilient demand to withstand security fears

Tue, 17th Nov 2015 12:23

* Full-year pretax profit up 18 pct, in line with forecasts

* Orders 36 more Airbus A320s

* Says forward bookings in line with last year

* Shares down 5 percent (Recasts, adds CEO comments)

By Sarah Young

LONDON, Nov 17 (Reuters) - Heightened fears about travel inEurope are affecting easyJet but appetite for flightsshould return quickly and resilient general demand will underpinthe airline's growth, its chief executive said on Tuesday.

European travel is reeling from Friday's attacks that killedat least 129 people in Paris, one of the world's most visitedcities, and a Russian plane crash over Egypt in October whichhalted flights from Britain to a popular Red Sea resort.

Travel to and from France has dropped off in the last fewdays and the number of "no show" passengers has risen, easyJetChief Executive Carolyn McCall said after the airline reportedan 18 percent rise in pretax profit for its 2015 financial year.

"You will always see a cooling-off period but you also seequite a quick resumption to travelling again," McCall toldreporters when asked about travel to and from France.

"What our own government and also what governments acrossEurope are doing is actually very reassuring for passengers.They are actually scrutinising airport security, now, probablyafter Paris, in a way that they've never done before," she said.

Analysts estimate that France counts for about 20 percent ofeasyJet's capacity.

The airline said the British government's suspension offlights to the Egyptian resort of Sharm al-Sheikh due toconcerns over security measures would have a "very, very small"impact on its full-year profits (in 2016)

Overall, for the coming year, the company said customers hadcontinued to buy tickets at the same rate as last year andeasyJet was confident profits would rise thanks to a 7 percentboost to passenger numbers this year and cost controls.

Shares in easyJet fell 5.0 percent to 1,695 pence, a declineanalysts put down to the airline's recent strong run. Its shareshave climbed 13 percent in the last year while Britain'sblue-chip index which has lost 6 percent.

PRICE WAR?

For the winter, easyJet's bigger low-cost rival Ryanair has talked of a price war in the cut-throat Europeanmarket as airlines raise capacity and compete against each otherin a lower fuel cost environment.

McCall dismissed the talk, saying easyJet's main competitionwas from airlines such as British Airways, AirFrance-KLM and others. easyJet forecast only a "slightdecline" in revenue per seat on a constant currency basis forthe six months to the end of March.

"Our airport overlap with Ryanair is between 5 and 6percent. It doesn't matter what they're doing on price," shesaid.

easyJet already has slots at major airports, an area whereRyanair is playing catch-up having historically focused on minorairports.

For its 2016 financial year, easyJet said current marketexpectations were in line with the board's forecast.

Analysts expect the airline to make a pretax profit of 746million pounds ($1.1 billion) next year, building on the 18percent rise in pretax profit in 2015 to 686 million pounds.

The airline also said it would order 36 new planes as partof a decision to exercise rights to 30 A320 NEOs under a 2013deal with Airbus, plus an order for six more currentgeneration A320s.($1 = 0.6590 pounds) (Editing by David Clarke)

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