EasyJet and rival airlines have driven down fares as they add more seats to try to grow market share during what has been a period of low oil prices.
But fuel prices have started to rise - they are up to about $53 a barrel from around $30 this time last year - and the pound has fallen 17 percent against the U.S. dollar since June’s Brexit vote, affecting easyJet as it buys fuel in dollars.
As a result, easyJet said pretax profit for the year to Septmeber 30, 2017, would take a £105m hit, up from the £90m hit it flagged in November.
“The results were in line with expectations other than the guidance on currency and fuel which will probably drive about a ten percent downgrade to consensus (profit forecasts),” Numis analyst Wynn Ellis said.
Before the announcement, analysts had been forecasting pre-tax profit would fall by 16 per cent to £414m for the 12 months to September 30.