Budget airline EasyJet’s (EZJ) latest results are making investors nervous as the weaker pound and unhelpful movements in fuel costs hit performance.

For the financial year to September 2017, the pound is expected impact pre-tax profit by approximately £105m, while a previously guided benefit from falling fuel prices is reduced from between £245m and £275m to between £215m and £240m

Shares in easyJet have fallen by nearly 10% to 970p as currency volatility remains a key focus for the market.

In October, Shares flagged that the stock was at a five-year low after analysts slashed forecasts.

After the Supreme Court’s ruling that the UK Government needs approval from Parliament to trigger Article 50 to leave the EU, the pound dropped by 0.7% against the dollar to $1.24.

easyJet graph

Investors are not reassured by some upbeat messages in Easyjet’s results, which revealed passenger numbers are up by 8.2% to 17.4 million, helping to boost revenue by 7.2% to £997m in the quarter to 31 December.

This has been driven by capacity growth of 8.6% to 19.3 million seats, although its load factor which assesses how efficiently it fills seats nudges 0.3 percentage points lower to 90%.

Stockbroker Panmure Gordon & Co analyst Mark Irvine-Fortescue recommends investors ‘sell’ as he believes the market is under-pricing the risks the airline is facing.

Davy Research analyst Stephen Furlong is also downbeat as easyJet continues to show weak revenue trends.

Revenue per seat is 8.2% lower at constant currency at £51.64.

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Issue Date: 24 Jan 2017