Budget airline Easyjet has said Britain’s planned exit from the European Union will have a severe impact on its business in the next six months. The rapid depreciation of the pound is among the most worrying factors.
Shares in British no-frills carrier Easyjet were the biggest loser within the FTSE 100 index in London on Monday. The budget airline had warned that Britain’s vote to quit the European Union would hurt its business over the coming months.
Airline officials said the referendum result would create uncertainty among potential clients, impacting Easyjet’s second-half performance that ends in September.
The carrier’s share price dropped by a staggering 19 percent in mid-day trading, making it the biggest faller in a benchmark index down 1.7 percent.
Hard enough without Brexit
“Easyjet is the biggest loser as the airline industry suffers amidst fears that the rapid depreciation of the pound may weigh on consumer choice when deciding on their upcoming summer holidays,” XTB analyst David Cheetham said in a statement.
Easyjet announced Monday that recent changes to exchange rates and higher fuel prices on the back of recovering crude were expected to add around 25 million pounds ($33 million, 20 million euros) in additional costs in the current financial year.
The carrier added that revenue per seat as a key measure of efficiency would fall by at least five percent in the six months to September from the same period last year.
Easyjet said its second-half performance was already being impacted by over 1,000 cancellations so far because of a French traffic controllers’ strike, congestion at London-Gatwick airport and bad weather spells.
hg/sri (AP/AFP)
