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Bloomberg
EasyJet Plc reported lower quarterly revenue and said volatility would affect the key summer travel season as the British low-cost carrier faces headwinds including a string of terrorist attacks across its main markets and Britain’s decision to exit the European Union.
Sales in the fiscal third quarter ended June 30 fell 2.6 percent to 1.2 billion pounds ($1.58 billion), the Luton, England-based company said on Thursday in a statement. Revenue per seat, or yields, slid 8.3 percent and are so far down about 7.5 percent in the fiscal fourth quarter. Shares dropped as much as 7.6 percent.
Terrorism incidents across Europe and North Africa since last year have deterred tourists and business executives from traveling, while a deadly attack in Nice, France, and a failed coup in Turkey in the past week have exacerbated the drop. EasyJet, which was betting on the region’s summer vacation season to revive traffic, is also contending with a plunge in the pound resulting from the British referendum last month to exit the European Union. Those effects, plus air-traffic disruptions due to strikes, combined to reduce third-quarter pretax profit by 28 million pounds, the company said late last month.
Labour stoppages, weather and runway closures in London “combined with industry capacity growth in short haul continue to have an impact on industry yields at a peak time of year,†Chief Executive Officer Carolyn McCall said in the statement Thursday. “More recently, currency volatility as a result of the U.K.’s referendum decision to leave the EU as well as the recent events in Turkey and Nice continue to impact consumer confidence.â€
EasyJet has faced the full brunt of events affecting the airline industry. Its reliance mainly on short-haul leisure travel makes the budget carrier vulnerable to demand shocks. Its base near London exposes the company to potential disruption caused by the UK’s decision to leave the EU, which could end agreements allowing it to fly freely around Europe. EasyJet’s shares have lost more than a quarter of their value since the Brexit referendum on June 23, more than any other European carrier.