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Budget airline Easyjet (LON:EZJ) has said that results for the fourth quarter will be strong after robust customer demand drove passenger and ancillary revenues. Industrial action across Europe has been a drag on revenues and profitability but management still believe that they will record a full year pre-tax profit within the range of £570-580 million, which is towards the upper end of prior guidance.
Chief executive Johan Lundgren said: “easyJet expects to deliver a strong performance in both Q4 and the full year, driven by better-than-expected growth in passenger and ancillary revenues, as well as reduced losses at our Tegel operation. We now expect our headline profits for the year to be between £570m and £580m, at the top half of our guidance range. This has been achieved despite higher costs caused by disruption due to third party industrial action and severe weather. However, we have benefited from a number of one-off events in 2018, including the bankruptcies of Monarch and Air Berlin, as well as Ryanair cancellations.
“In the fourth quarter we made the decision to change our approach to technology development. Rather than a full replacement of our core commercial platform, we will be investing in better utilisation and development of existing systems on a modular basis. This has resulted in a non-headline charge of £65m as we repurpose our systems to create a better service for our customers.
“We look forward to FY 19 as we continue to invest in the long-term strategic initiatives that we set out at the half year.”
Shares in EasyJet dropped by 2.57% to 1,291.50p (as of 13:00 BST).