Low-cost carrier says an agreement between the UK and the EU means planes will keep flying but fears softening consumer demand would impact on full-year profits. Tony McDonough reports
Low-cost airline easyJet say its planes will keep “flying as usual” in the event of a no-deal Brexit but warned ongoing uncertainty was hitting ticket sales.
The carrier flies to 32 destinations from Liverpool John Lennon Airport and in a trading update it for the half-year to March 31 its chief executive Johan Lundgren confirmed an agreement between the EU and the UK means planes will keep flying regardless of the Brexit outcome.
But he warned the company’s full-year profits were likely to take a hit from falling demand from consumers who were unsettled by the uncertainty surrounding the UK’s departure from the EU.
The update said easyJet was likely to see pre-tax losses for the half-year of around £275m. The company traditionally sees a loss in the half-year that includes the winter season and the figure is in line with market expectations.
However, the loss is considerably wider than the £68m reported for the same period last year when it benefited from the collapse of Monarch and troubles at its main rival Ryanair.
Revenues for the six-month period are expected to rise by 7.3% to £2.34bn but 14.5% increase in seat capacity to 46.2m as well as higher fuel prices have pushed up costs with revenue-per-seat expected to decline by 7.4%.
Mr Lundgren said: “We have flown around 42m customers (in the half year) with a significantly reduced number of cancellations and continued high levels of customer satisfaction.
“We are operationally well prepared for Brexit. Now that the EU Parliament has passed its air connectivity legislation and together with the UK’s confirmation that it will reciprocate, means that whatever happens, we’ll be flying as usual. I am pleased that we have also made progress on our European ownership position which is now above 49%.
“For the second half we are seeing softness in both the UK and Europe, which we believe comes from macroeconomic uncertainty and many unanswered questions surrounding Brexit which are together driving weaker customer demand.
“We are rolling out further initiatives to support our trading and are making significant progress in our operational resilience programme, which is designed to make the easyJet flying experience better for our customers over the summer.”