Earnings

Britain's easyJet warns of tougher year, revenues to be lower

Key Points
  • EasyJet said that its performance in the six months to March 31 was in-line with expectations, with a 13.3% increase in passenger numbers.
  • Headline loss before tax was 275 million pounds ($352 million) in what is easyJet's off-peak season, also impacted by the late timing of Easter.
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British budget airline easyJet warned of a worsening trading environment on Friday and said revenue per seat in the second half of the year would be down as consumers are deterred by uncertainty over Brexit and economic weakness in Europe.

In April, easyJet said its outlook for the second half of the year was more cautious because European travelers were holding off booking their summer holidays for fear of how the Brexit process will pan out, weakening demand for tickets and prices.

An EasyJet Airbus A320 aircraft is seen at Malpensa Airport near Milan, Italy, October 3, 2018.
Stefano Rellandini | Reuters

EasyJet said that its performance in the six months to March 31 was in-line with expectations, with a 13.3% increase in passenger numbers. Headline loss before tax was 275 million pounds ($352 million) in what is easyJet's off-peak season, also impacted by the late timing of Easter.

But moving into the summer, easyJet said that forward bookings for the third quarter were 3 percentage points behind last year at 72%.

"It's not so much that there isn't any demand out there, but it's definitely a tougher trading environment, which has an effect on the pricing," Chief Executive Johan Lundgren told BBC radio.

"It's partly down to the uncertainty that exists around Brexit. There's macroeconomic uncertainties in a number of European countries, and all of that... means there's a different environment this year than what we saw last year."

Although revenue per seat is expected to be down in the second half, easyJet said it also expected costs per seat to fall too, helped by prior investment in operational resilience to disruption.

The airline said its profit expectations for 2019 were unchanged but its capacity growth in 2020 would be at the lower end of its historic growth rates.