EasyJet swings to half-year loss as security fears hit travel

EasyJet posted a first-half loss as a spate of terrorist attacks undermined demand for flights and contributed to a Europe-wide capacity glut that's weighing on fares and wiping out gains from cheap fuel.

EasyJet swung to a pretax loss of £24 million (€30.4 million) from a profit of £7 million a year earlier, it said in a statement. Analysts had expected Europe’s second-biggest discount airline to report a shortfall of £25.7 million, based on estimates collected by Bloomberg.

Luton, England-based EasyJet halted flights to Sinai after the bombing of a Russian tourist jet in October, while November’s Paris shootings and the March 22 attacks on Brussels have further weighed on sales. Third-quarter revenue per seat may decline 7 per cent as a result of the Belgian events, it said.

Chief eExecutive Carolyn McCallsaid EasyJet’s fiscal 2016 pretax profit should be in line with analyst forecasts. As of May 9th, that figure was £721 million pounds, according to company-compiled data. That’s declined from a consensus of £738 million as of January 26th.

Against a background of stalling demand, EasyJet faces heightened competition as low-cost leader Ryanair targets more major airports, as well as an expansion of IAG's Vueling discount-arm and makeovers at the no-frills units of Deutsche Lufthansa AG and Air France-KLM Group.

Lufthansa, Air France-KLM and British Airways-parent IAG have all in the past two weeks posted quarterly earnings that beat estimates, while warning of a weakening in yields or fares as sales fail to keep pace with summer capacity increases.

Ryanair posts earnings for the year ended March 31st on May 23rd.

Bloomberg