EasyJet cautious on outlook as Brexit hits demand

EasyJet shares fell after the budget airline said uncertainty over Brexit and the economy had dampened its outlook as consumer demand for air travel weakened.

Demand for air travel has weakened because of Brexit and wider economic uncertainty, leading to “softness” in fares per passenger per mile in the UK and Europe, easyJet said. The company said this weakness had made it more cautious about the outlook for the second half.

Johan Lundgren, EasyJet’s chief executive, said: “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.”

EasyJet shares fell more than 8% in early trading and were down 7.4% to £10.35 at 08:52 UK time.

The FTSE 100 carrier said it expected to post a headline pre-tax loss of £275m for the six months to the end of March as revenue rises 7.3% to about £2.34bn. Airlines traditionally report losses for the winter months.

Revenue per seat for the first half will be about 7.4% lower, which easyJet said was in line with guidance issued in January. Costs per seat rose about 1.4% as crew costs increased.

Lundgren said easyJet’s operations were well prepared for Brexit. Despite the uncertainty second-half revenue per seat at constant currency is expected to rise slightly as weaker third-quarter demand gives way to a more certain outlook on Brexit and the company reaps the benefit of revenue initiatives.