Brexit uncertainty puts more pressure on EasyJet
EasyJet is expecting to report approximately £275 million ($361 million) loss before tax for the first half of 2019, “in line” with previous prediction. Disclosing finances the previous time, the carrier described passenger demand as “robust”. But now, situation has become more grim due to Brexit uncertainty, it claims.
Ahead of the UK-EU divorce, EasyJet is changing its ownership to have more EU nationals. EU law requires local airlines to be majority owned by EU shareholders. EasyJet meets the requirement now, but once UK nationals are removed from the list, the will no longer be the case. In a previous disclosure in January 2019, EasyJet stated that around 49% of its shares were owned by qualifying nationals. Now, the number has slightly increased to 49.92%, but still falls short of the requirement.
Even bigger trouble the low cost carrier is seeing with passenger demand. Booking levels were “encouraging” when the previous time the airline was reporting on the issue. “For the first half of 2019, booking levels currently remain encouraging despite the lack of certainty around Brexit for our customers,” the company’s Chief Executive Johan Lundgren was quoted as saying in January 2019 statement.
But now, situation has changed and Brexit uncertainty already reflects in ticket sales. “Whilst easyJet will deliver H1 results in line with expectations, macroeconomic uncertainty and many unanswered questions surrounding Brexit are together driving weaker customer demand in the market, such that we are seeing increasing softness in ticket yields in the UK and across Europe,” the latest statement reads.
Eurostat data reveals that among 28 European Union countries, numbers of International intra-EU air passenger transport were the highest in the United Kingdom, with over 46 million passengers recorded in 2018 Q2. A runner-up Spain accounted for 41 million passengers.
EasyJet released a pre-close statement of first half of 2019 (ending March 31, 2019) financial results on March 28, 2019. Statement of the first quarter of the year (ended December 31, 2018) was issued on January 22, 2019
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