Flight bookings to Europe drop due to attacks, airline warns

EasyJet’s outlook, already affected by Britain’s vote in favour of exiting the European Union, has been further clouded by last week’s Nice massacre and the failed military coup in Turkey.

The sharp fall in the pound since the Brexit vote has pushed costs up by £40m, according to McCall, largely because fuel is priced in the stronger USA dollar.

The airline also said that the outcome for the fourth quarter was uncertain.

EasyJet has faced the full brunt of events affecting the airline industry. Until now easyJet has been coping well, with rising passenger numbers offsetting lower revenues per seat.

Airline stocks (JETS -2.8%) are broadly lower following Southwest Airlines’ (LUV -8.8%) Q2 earnings miss and downbeat guidance for a 3%-4% decline in Q3 RASM from a 0.6% gain in Q2.

easyJet announced in a statement this morning that its total revenue per seat had dropped by 8.3 percent at constant currency to £54.54 per seat, while total revenue for the quarter had fallen by 2.6 percent to £1.2 billion.

She made the comments as easyJet published a trading update for the third quarter. The company attributed the weaker performance to a number of factors including air traffic control strikes and other industrial action, runway closures at London Gatwick and severe weather.

The firm said it lost £20million after being forced to cancel a record 1,221 flights in the three months to the end of June.

The carrier said it had sold about 65% of seats available in its final quarter to the end of September, with per-seat revenue falling 7.5% at a constant currency basis.

EasyJet says a team has been “mobilised” and is “actively engaging” in discussions to secure rights on services within Europe.

“This combined with industry capacity growth in short haul continues to have an impact on industry yields at a peak time of year”. Passengers are avoiding city trips while tour companies TUI AG and Thomas Cook Group Plc divert travelers away from North Africa and the Middle East to destinations such as Spain and Portugal, triggering a 14 percent increase in competition on EasyJet’s beach routes, the company said.

Lufthansa said late Wednesday its core earnings for 2016 would be below last year’s, downgrading its previous forecast. Moreover, in past downturns like the financial crisis and the euro crisis of 2011, easyJet snatched market share from higher-cost rivals.