The oil price crisis is worse than the City feared for easyJet as Britain's largest airline today admitted its profits have collapsed by around 40%.

The budget carrier said today that a £185 million rise in its annual fuel bill will see its profits for the year to the end of September come in at between £110 million and £120 million.

That compares to the £191 million it reported last year and is down far further than consensus City estimates which forecast profits from the carrier of around £138 million.

And the airline warned in its latest trading update released today that things may get worse, adding that its previously planned growth in the number of routes and flights in the next year has been pared back to between 4% and 6%.

The dive in profits comes despite strong revenues as easyJet has increased average fares as well as passenger numbers. In the nine months to the end of June passenger numbers rose 16% to 11.5 million and average fares were up 12% to £46.36.

Total revenues were 32% better on the back of strong ancillary revenues.

•The aviation crisis has hit investors in Jet2, the airline reckoned to be the north of England's busiest carrier. Its parent company, quoted Dart Group, said it will not be paying a dividend because of the uncertainty in the business.