UK's easyJet upbeat despite £15m hit from drone disruptions
Total revenue rose by 13.7 per cent in its fiscal first quarter after passenger numbers rose to 21.6 million
UK budget airline easyJet lost £15 million (Dh70.8m) in the 36 hours of travel chaos sparked by drones flying into London's Gatwick Airport in December, it said on Tuesday.
The company, the largest operator at Britain's second biggest airport, said the disruption affected 82,000 customers and forced the cancellation of more than 400 of its flights in the run up to Christmas.
That knocked around £5m off its revenue and cost the airline £10m to help its customers.
However, the group gave an otherwise upbeat trading update and said 2019 bookings were encouraging despite uncertainty around Brexit, according to Reuters, striking a more positive tone than rival Ryanair, which issued a profit warning last week.
Despite the drone incident, easyJet said it expected full-year headline profit before tax, broadly in line with market expectations.
Total revenue rose by 13.7 per cent to £1.3 billion in its fiscal first quarter to December 31, after passenger numbers rose by 15.1 per cent to 21.6 million.
"We feel that this environment is robust and solid, and we do well in it," said chief executive Johan Lundgren.
Gatwick was forced to close its runway in December when drones flew near the site south of London in the most disruptive incursion by unmanned aerial vehicles at any major airport.
The incident forced the cancellation or diversion of around 1,000 flights, affecting 140,000 passengers over three days.
Analysts at RBC said they had trimmed their profit before tax forecast for easyJet by 3 per cent as a result of the Gatwick disruption, but retained their "outperform" rating as "far worse" earnings cuts were already priced-in.
EasyJet said it had enjoyed a good operating performance with the exception of the Gatwick disruption and took a different view of the market from Ryanair, which warned lower than expected winter air fares would hit its full-year profit.
"Second half bookings continue to be ahead of last year," Mr Lundgren said.
Still, easyJet said revenue per seat, a measure of fares, will drop by mid-to-high single digit percentage points in the fiscal second quarter through March, at constant currencies. That’s after a 4.2 per cent drop in the first quarter.
Ryanair set the tone last week with a second profit warning in three and a half months as winter fares fell three times faster than predicted. Conditions are now starkly different from a year ago, when the exit of Air Berlin and Monarch Airlines removed excess seats and lifted fares – although easyJet said rivals have been more disciplined in restoring capacity growth in some of its markets.
Updated: January 22, 2019 02:00 PM