UK airline EasyJet has said that the fall in value of the pound after last-year’s Brexit vote will knock around $131 million (£105 million) off its full-year pre-tax profits as it warned of a “tough pricing and operating environment.”

The cautious outlook came as the carrier reported that revenue during the first quarter increased by 8.2 percent to $1.2 billion (£997 million). Passenger numbers also rose, by 8.2 percent to 17.4 million, on the back of an 8.6 percent capacity uplift.

Carolyn McCall, EasyJet CEO, said: “EasyJet has delivered a solid first quarter with revenue, cost and passenger numbers in line with expectations. This is despite a tough pricing and operating environment.”

She added: “The weakness of Sterling and the impact of fuel combined are £35m worse than previously expected but easyJet has made good progress in reducing costs in those areas where we have more control such as engineering, maintenance, non-regulated airports and overheads.”

Since the UK voted to leave the European Union in June, EasyJet has seen its share price collapse by 35 percent.

The carrier is looking to mitigate some of the potential damage by establishing a European air operator’s certificate so that it can continue flying within Europe. Without such a certificate, EasyJet would likely be able to continue flying from the UK to Europe but not necessarily within Europe.

In the first quarter this cost it $498,000 (£400,000) with total costs expected to be around $12.5 million (£10 million) over a two-year period.

Continued low fuel prices have also made things tougher for the airline as it has enabled competitors to increase capacity.

Gerald Khoo an analyst at Liberum called it a “mixed update, with the Q1 performance largely as expected but a more challenging outlook.”

Photo Credit: An EasyJet aircraft. The carrier has warned of a “tough pricing and operating environment.” EasyJet