EasyJet has issued a Brexit warning today after it posted a loss before tax of £272m in its half-year results, compared to a loss of £68m the same time last year. It says Brexit, increased fuel costs and the Gatwick drone incident which caused the carrier to lose millions between October and March are to blame. However, EasyJet’s CEO noted today that “easyJet has the strongest balance sheet in aviation”. Despite the news, easyJet has said it would go on to meet its profit expectations in 2019.
The carrier’s profits are “expected to be around £440m”.
In response, shares in the airline rose by 4.9 per cent in early trading. They had previously fallen 13 per cent since its April trading update to their lowest in more than two years.
So are your flights with easyJet affected?
Johan Lundgren, easyJet Chief Executive, has said there will be no impact on flights. Commenting on the results, he said: “Cost control remains a major priority for easyJet. Our focus is on efficiency and on innovation through data and we are on track to deliver more than £100m in cost savings during 2019.
“We are well-equipped to succeed in this more difficult market through a number of short term customer and trading initiatives for the summer; measures to improve our operational resilience; and by focusing on what is most important to customers – value for money, punctuality and great customer service. All this is underpinned by a market leading balance sheet.”
But does easyJet need to improve?
Laura Beaton, Travel & Tourism analyst at data and analytics company GlobalData said airlines would have no other option but to push ahead despite these threats if they’re to survive.
“Brexit is obviously a huge threat to the airline industry but with the uncertainty only continuing, easyJet cannot afford to dwell on it,” she said.
“Instead, the company has to focus on improving its own service and image. According to the 2019 annual ratings from AirHelp, EasyJet was ranked the second worst airline in the world, after Thomas Cook.”
Beaton added: “easyJet really needs to reassess and think how it can make improvements.
“EasyJet was shown to have just a 67 per cent on-time performance, admittedly much better than Thomas Cook’s 57 per cent but only a slight improvement on Ryanair’s 65 per cent.
“Delayed flights cause major dissatisfaction, especially for low cost carriers as there is not much else in terms of offerings to make up for the inconvenience.
“However, the half-year report shows the passenger numbers for the six months to March 2019 increased by 4.9 million passengers (13.3 per cent) so demand is still increasing despite Brexit.
“The recent addition of five new routes from Bristol to destinations in Greece, France, and Italy is a step in the right direction. Hubs outside of London can benefit the rest of the country too, especially as short domestic hops are frequent for the company.
“The company has already attempted to protect itself from the adverse effects of Brexit with EasyJet Europe, which has its headquarters in Vienna so the group is now a pan-European airline group with three airlines based in Austria, Switzerland and the UK.”
What happened to Thomas Cook?
Meanwhile, a Thomas Cook report showed the firm suffered la £1.5 billion half-year loss as Brexit uncertainty has put Britons off booking holidays.
Thomas Cook Boss Peter Fankhauser said there was “now little doubt” that Brexit had caused UK holidaymakers to postpone their summer travel plans. He also said there had been no pick-up since the EU withdrawal deadline was pushed back to October.
Thomas Cook is taking urgent money-saving measures which include: Axing 150 roles from its head office in Peterborough and Possible further store closures, having already announced plans in March to shut 21 stores and axe 320 retail roles.
Holidaymakers will be pleased to hear that they won’t lose out in the unlikely event of Thomas Cook’s closure.
That’s because Thomas Cook holidays are ATOL (Air Travel Organiser’s Licence) protected. UK travel companies which sell package holidays and flights have to ATOL protect them.
This means customers who have booked holidays with the firm are protected and can’t get stranded abroad or be left out of pocket.