The British low-cost airline easyJet (EZJ.L) reported a 3.7 percent fall in revenue per seat on a constant currency basis in the quarter ending December 31.
According to easyJet, the demand for travel slowed following terror attacks in Paris and Egypt in 2015.
James Hollins, an analyst at Nomura, does not believe these impacts will have longstanding effect;
“While the French and Egyptian issues have had a more damaging impact on fares than we had expected, these are relatively exceptional and short-term issues, while the more controllable and longer-term issue of cost efficiencies is better than we had envisaged,”
In light of the security fears, easyJet plans to cut costs for customers further. These attempts have been helped by the drop in oil prices, which are currently at a twelve year low.
EasyJet CEO, Carolyn McCall, has said in a statement;
“This year we will consolidate a low-fare strategy with a relentless focus on cost reduction which is already delivering results. This will ensure that EasyJet continues to win and continues to grow revenue, profit and dividends.”
The drop in fuel costs and strong demand on UK beach routes are predicted to save £75m-£85m in the first half from the same period last year meaning the airline is likely to reach market expectations of £738m profit for the full year.
EasyJet fell 1.7 percent to 1,604 pence as of 9:14 a.m. in London trading. The stock has dropped 7.8 percent this year.
26/01/2016
