Airlines are facing one of their most challenging periods “for a long time”, with peak summer bookings hit by terror attacks and Brexit uncertainty, the boss of EasyJet said Thursday.
Carolyn McCall’s comments to reporters came after the British no-frills airline published a third-quarter trading update that failed to provide a full-year profits forecast.
EasyJet’s outlook, already affected by Britain’s vote in favour of exiting the European Union, has been further clouded by last week’s Nice massacre and the failed military coup in Turkey.
The airline’s share price was the biggest loser on London’s benchmark FTSE 100 index in morning deals, dropping 4.6 percent and dragging down rivals’ valuations.
McCall told a conference call that airlines were facing “one of the most difficult periods that we’ve seen in a very long time”.
She said that a drop in consumer confidence was “not entirely due to Brexit”, noting that EasyJet’s performance had been hit also by a slump in the pound, strike action, severe weather factors and the Brussels terror attack in March.
On the Brexit fallout, McCall said a 10-percent drop in the value of the pound against the dollar since the referendum outcome had cost EasyJet some £40 million ($53 million, 48 million euros).
But she insisted that the airline would “continue to grow in the UK” — in contrast to Hungarian budget airline Wizz Air which has cut back its British expansion plans on Brexit and the subsequent slump in sterling.
Since the June 23 referendum, EasyJet has applied for a European Union licence to keep flying throughout the bloc — becoming the first carrier to activate a contingency plan.
On Thursday meanwhile, EasyJet “provided a third quarter update which, as we expected, confirmed that trading has been difficult in recent months”, said Ian Forrest, investment research analyst at The Share Centre.
“Overall revenue fell 2.6 percent to £1.2 billion and revenue per seat dropped 8.3 percent at constant currency in the period.”
Nicholas Hyett, equity analyst at stockbroker Hargreaves Lansdown, said the industry’s move to increase capacity “for some time… is starting to have an effect on pricing, squeezing revenue per seat”.
