EasyJet warns of tough market from rising competition

EasyJet has lowered expectations of a fast turnround in the European airline industry after it warned the market would remain tough because of increased competition that was pushing down fares. Europe’s second-biggest low-cost carrier on Thursday lifted its full-year profit forecast to a range of GBP380m to GBP420m, above the current analyst consensus of GBP375m, after reporting a strong Q3. But shares in easyJet fell by almost 5% after the airline said it expected revenue per seat to fall by 2% in the six months to September. It added that pressure on yields was also likely to extend into the next financial year. Dame Carolyn McCall, who will leave easyJet at the end of the year to head up UK broadcaster ITV, said there has been a lot of additional capacity in Spain and Portugal this summer. “We’re not saying it is getting worse. The capacity environment is better but there is still growth and the reason for that growth in capacity is that fuel remains low. We’re simply saying pricing is not going to bounce back to plus-this or plus-that,” she said. Analysts said it would dampen expectations of a fast turnround in the European airline industry, which has been struggling with a glut of new capacity that is pushing down fares as well as the effect of the terror attacks in the EU and Brexit. <br/>