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EasyJet losses soar as higher costs and drone disruption take toll EasyJet losses soar as higher costs and drone disruption take toll
(about 1 hour later)
EasyJet blamed economic uncertainty across Europe, exacerbated by Brexit, for a £275m loss in the first half of its financial year, with higher fuel costs and a £10m blow from the drone disruption at Gatwick airport in December adding to its problems.EasyJet blamed economic uncertainty across Europe, exacerbated by Brexit, for a £275m loss in the first half of its financial year, with higher fuel costs and a £10m blow from the drone disruption at Gatwick airport in December adding to its problems.
The budget carrier’s pre-tax loss in the six months to 31 March contrasted with just £18m in the same period last year. The company said revenue per seat was likely to fall again for the summer, which could lead to lower fares. The budget carrier’s pretax loss in the six months to 31 March contrasted with just £18m in the same period last year. The company said revenue per seat was likely to fall again for the summer, which could lead to lower fares.
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Despite a weaker trading outlook, easyJet said it would meet expectations in 2019, and had made £45m of cost savings to date, partly through the end of leasing arrangements for planes at Berlin Tegel, and also through reducing cancellations.Despite a weaker trading outlook, easyJet said it would meet expectations in 2019, and had made £45m of cost savings to date, partly through the end of leasing arrangements for planes at Berlin Tegel, and also through reducing cancellations.
“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,” easyJet’s chief executive, Johan Lundgren, said.“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,” easyJet’s chief executive, Johan Lundgren, said.
The airline said last month that its outlook for the second half of the year was more cautious because European travellers were holding off booking their summer holidays amid doubts about how the Brexit process would pan out. Lundgren said however that the company had now sold 3% more seats than at the same time last year, albeit at lower prices.The airline said last month that its outlook for the second half of the year was more cautious because European travellers were holding off booking their summer holidays amid doubts about how the Brexit process would pan out. Lundgren said however that the company had now sold 3% more seats than at the same time last year, albeit at lower prices.
He admitted that operations at Tegel, where EasyJet acquired part of bankrupt carrier Air Berlin in December 2017, would take longer to turn a profit and were unlikely to break even this year, as forecast. Lundgren said EasyJet was in ongoing dialogue with Gatwick over compensation for its £10m drone losses.He admitted that operations at Tegel, where EasyJet acquired part of bankrupt carrier Air Berlin in December 2017, would take longer to turn a profit and were unlikely to break even this year, as forecast. Lundgren said EasyJet was in ongoing dialogue with Gatwick over compensation for its £10m drone losses.
Lundgren said: “It’s a tougher trading environment than in past years: general uncertainty, and Brexit hasn’t helped. In a number of markets we’ve seen a deterioration in the macroeconomics – people are more cautious in their outlooks and behaviour. Demand is there but it has put pressure on pricing and yield across Europe.”Lundgren said: “It’s a tougher trading environment than in past years: general uncertainty, and Brexit hasn’t helped. In a number of markets we’ve seen a deterioration in the macroeconomics – people are more cautious in their outlooks and behaviour. Demand is there but it has put pressure on pricing and yield across Europe.”
He said work to minimise the effects of disruption – primarily due to air traffic control staff shortages – would cut costs as well as helping passengers. He said that by changing schedules and increasing standby aircraft and crew, the airline had reduced to zero the number of flight cancellations at Easter, from 375 in 2018, despite increased air traffic controls problems. He said work to minimise the effects of disruption – primarily due to air traffic control staff shortages – would cut costs as well as helping passengers. He said that by changing schedules and increasing standby aircraft and crew, the airline had reduced to zero the number of flight cancellations at Easter, from 375 in 2018, despite increased air traffic controls problems. 
Shares in the company, which had fallen 13% since the April trading update to their lowest in over two years, were up 5% by Friday afternoon.Shares in the company, which had fallen 13% since the April trading update to their lowest in over two years, were up 5% by Friday afternoon.

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.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.
George Salmon
easyJeteasyJet
Airline industryAirline industry
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