Low-cost airline Easyjet says its outlook for the second half of the financial year is “more cautious” than previous forecasts because uncertainty over Brexit is driving weaker demand for the summer.
The carrier is expecting to report a first-half headline loss of around £275 million for the six months to 31 March, largely driven by an 18.8 per cent rise in costs due to increased capacity, higher fuel unit costs and an increase in cost per seat. Excluding fuel, cost per seat is predicted to jump 1.4 per cent, in line with expectations.
Total first half revenue is forecast to grow 7.3 per cent to around £2.34 billion, with seat capacity increasing 14.5 per cent as Easyjet continues its attempts to strengthen its position in key markets.
While the airline says it is making progress on increasing its European ownership (currently at 49.92 per cent) in preparation for the UK’s exit from the EU, Easyjet says “macroeconomic uncertainty and many unanswered questions surrounding Brexit” have caused an “increasing softness” in ticket yields across the UK and EU.
Despite weaker demand, Easyjet predicts revenue per seat for H2 to be slightly up, as the uncertainty around Brexit could start to clear in the fourth quarter.
CEO Johan Lundgren commented: “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 that it will reciprocate, means that whatever happens, we’ll be flying as usual.
Lundgren said the carrier is rolling out initiatives to “support our trading” and “make the Easyjet flying experience better for our customers over the summer”.
Final details on Easyjet’s performance in H1 will be released on 17 May.