easyJet assures that the uncertainty before the ‘Brexit’ affects a “weaker” air demand in Europe

It foresees that revenues increase by 7.3% in the first semester due to the increase in supply

easyJet has affirmed that the uncertainty that the ‘Brexit’ throws, both at a macroeconomic level and by the questions still unanswered in the future relationship between Europe and the United Kingdom, is affecting a “weaker demand” in the market, especially in the Reservations made in the UK and throughout Europe.

The British airline forecasts operating losses before taxes of around 275 million pounds sterling (320.4 million euros), as it had advanced at the end of January.

easyJet, which will present first half results in May “in line with its expectations”, has nevertheless shown itself to be “more cautious” regarding its forecasts for the second half of the 2019 fiscal year.

It foresees that the total income of the first semester will increase by 7.3%, to 2,340 million pounds sterling (2,726 million euros), and that its capacity will grow by 14.5% thanks to its positioning in key markets such as Berlin, while their income per seat fell by 7.4%, in line with expectations.

“For the second half we are seeing softness in both the United Kingdom and Europe, which we believe comes from macroeconomic uncertainty and many unanswered questions surrounding the ‘Brexit’ that are driving a weaker customer demand,” he said. the CEO of easyJet, Johan Lundgren.

PREPARE FOR THE ‘BREXIT’

easyJet has explained that it continues to make progress with respect to the property requirements demanded by European regulations – which require that at least 51% of the capital be in European hands – which, excluding UK shareholders, already reaches 49.22%. “We are operationally prepared for the ‘Brexit’, whatever happens we will be flying as usual”, assured the first executive of the low cost airline.

In this line, the British low-cost airline recalls that the European Parliament has already approved regulations to ensure air connectivity between the EU and the United Kingdom once its departure occurs, together with the confirmation by the British Government to apply reciprocal measures.

This, together with the operational initiatives carried out by the company, assures easyJet, will enable the airline to continue flying as it has been up to now, whatever the scenario. “We are implementing new initiatives to support our operations and we are making significant progress in our operational resilience program, designed for the summer,” the airline explained.

In July 2017, easyJet obtained an Air Operator Certificate (AOC) in Austria to create a new company, easyJet Europe, based in Vienna, and bypass the possible effects of ‘Brexit’ in the different European countries, by functioning as a Pan-European group with three operators based in Austria, Switzerland and the United Kingdom.

WEAKENING OF DEMAND

Despite this, easyJet expects its revenue per available seat during the second half of the year to increase slightly, reflecting a weakening of underlying demand in the third quarter, while for the fourth quarter it will be driven by its initiatives put into effect. march for the ‘Brexit’.

On the cost side, the company estimates that they will grow 18.8% in the second half of the year due to increased capacity, higher unit costs for fuel and an increase of 1.4% in seat cost. , excluding fuel.

For the full year, it does not see variations in its costs per seat, excluding fuel at a constant exchange rate, which it expects to follow if there are no factors that cause the interruption of operations.