Chief executive Johan Lundgren said the Brexit circus in Westminster had conspired along with “macroeconomic uncertainty” to drive “weaker customer demand”, likely to impact its second-half results.
Lundgren confirmed the airline was on course to deliver H1 (six months to March 31) performance “in line with expectations” following guidance dating to January 22.
While easyJet expects H1 revenue to grow 7.3% to about £2.34 billion on an increase in seat capacity of about 46.2 million (14.5%), it said a £37 million fuel bill and £8 million hit from foreign exchange had contributed to the loss. The airline will post its full H1 results on May 17.
“While easyJet will deliver H1 results in line with expectations, macroeconomic uncertainty and many unanswered questions surrounding Brexit are together driving weaker customer demand in the market, such that we are seeing increasing softness in ticket yields in the UK and across Europe,” said the airline. “Given this uncertainty, our outlook for H2 is now more cautious.
“Despite this, H2 revenue per seat at constant currency is expected to be slightly up, which reflects weakening Q3 underlying demand and an expected year-on-year uptick in Q4 driven by a programme of yield initiatives and an assumption of a more certain Brexit outlook.
“There is no change to guidance for full-year headline cost per seat excluding fuel at constant currency, which is still expected to be circa flat (assuming no abnormal levels of disruption).”
H1 revenue per seat is expected to decline by around 7.4%, while headline cost per seat, excluding fuel at constant currency, is expected to increase by around 1.4%.
Total headline cost for H1, meanwhile, is expected to increase around 18.8% due to increased capacity, higher fuel unit costs and a modest increase on cost per seat, excluding fuel.
Said Lundgren: "easyJet has performed in line with expectations in the first half. We have flown around 42 million customers 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 it will reciprocate, this means whatever happens, we’ll be flying as usual.
"I am pleased 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, designed to make the easyJet flying experience better for our customers over the summer.”
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