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EasyJet shares drop after Brexit warning
EasyJet has issued a trading update warning that its revenue per seat is likely to fall following the UK’s vote to leave the EU.
The statement prompted an 18% drop in the airline’s shares.
EasyJet expects economic and consumer uncertainty will cause revenue per seat at constant currency in the second half to drop by at least a mid-single digit percentage compared to the second half of 2015.
"In addition, recent movements in fuel prices and exchange rates are now expected to add around £25 million of additional cost in the year to that guided at the half year results," it said.
"In response, easyJet is continuing its efforts to drive ex fuel cost savings."
The airline said May and June have already been extremely challenging.
It has been forced to cancel 1,061 flights in the third quarter due to continued strike action by French air traffic controllers, runway and congestion issues at Gatwick airport, and severe weather.
"In June alone there have been over 700 cancellations to date, with strikes and weather conditions accounting for most of these and over 300 flights cancelled in the last seven days," it said.
"In June 2015 there were 487 cancellations, of which 420 related to the Fiumicino fire and thus were largely pre-planned."
The airline said it had also been impacted by a drop in demand following the Egyptair tragedy.
This has knocked third quarter profit before tax by around £28 million and around 1.6 percentage points off revenue per seat.
"This means that revenue per seat at constant currency in the third quarter will fall by around 8.6%, compared to the c.7% decrease guided at the half year results, as disrupted passengers were allocated seats that normally would have been sold close to departure for a higher yield," it said.
A further update on current trading will be made at its third quarter results on July 21.
Bev
Editor in chief Bev Fearis has been a travel journalist for 25 years. She started her career at Travel Weekly, where she became deputy news editor, before joining Business Traveller as deputy editor and launching the magazine’s website. She has also written travel features, news and expert comment for the Guardian, Observer, Times, Telegraph, Boundless and other consumer titles and was named one of the top 50 UK travel journalists by the Press Gazette.
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