EasyJet revenues dented by Paris terror attacks

A drop-off in air travel following the terrorist attacks on Paris and the suspected bombing of a passenger plane over Egypt hurt easyJet’s revenues at the end of 2015, although the budget airline said demand was starting to recover.

Revenues per seat were strong in October but fell sharply in November and December, easyJet said in a trading statement. The airline shares, which were down 10% since the Paris attacks, fell 2% to £15.99 in early trading on Tuesday.

For the three months to the end of December, the first quarter of easyJet’s financial year, revenue per seat fell 3.7%, excluding currency fluctuations.

The coordinated attacks in Paris on 13 November and the halting of flights after the downing of a Russian flight from Egypt on 31 October, which Russia claims was caused by a terrorist bomb, accounted for about 2 percentage points of the fall, the airline said.

EasyJet, the second-biggest airline in France, said in November that business to and from the country had fallen and that customers were choosing not to show up for flights. The company said on Tuesday that revenue per seat had picked up in January.

The airline cut costs quicker than planned in the final quarter of 2015. Along with benefits of falling fuel prices, cost reductions allowed easyJet to keep profit guidance in line with market forecasts. EasyJet said that if fuel prices remain stable it will save £165m-£180m this year although exchange rate changes would cost around £50m.

The company said: “Following a strong October, revenue per seat was impacted by events in Egypt and Paris and was down high single digits in November and December. Forward bookings for the second quarter are showing a marked improvement in revenue per seat compared to November and December.”

The number of passengers carried rose 8.1% to 16.1m in the three months to the end of December, mainly because of increased capacity. The average analyst forecast for pretax profit for the year ending in September is for a record £738m, up from £686m last year.

Powered by Guardian.co.ukThis article was written by Sean Farrell, for theguardian.com on Tuesday 26th January 2016 09.35 Europe/Londonguardian.co.uk © Guardian News and Media Limited 2010


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