London - EasyJet posted a first-half loss as a spate of terrorist attacks undermined demand for flights and contributed to a Europe-wide capacity glut that’s weighing on fares and wiping out gains from cheap fuel.
EasyJet swung to a pretax loss of £24m from a profit of £7m a year earlier, it said in a statement on Tuesday. Analysts had expected Europe’s second-biggest discount airline to report a shortfall of £25.7m, based on estimates collected by Bloomberg.
Luton, England-based EasyJet halted flights to Sinai after the bombing of a Russian tourist jet in October, while November’s Paris shootings and the March 22 attacks on Brussels have further weighed on sales. Third-quarter revenue per seat may decline 7% as a result of the Belgian events, it said.
Chief executive officer Carolyn McCall said EasyJet’s fiscal 2016 pretax profit should be in line with analyst forecasts. As of May 9, that figure was £721m, according to company-compiled data. That’s declined from a consensus of £738m as of January 26.
Against a background of stalling demand, EasyJet faces heightened competition as low-cost leader Ryanair targets more major airports, as well as an expansion of IAG SA’s Vueling discount-arm and makeovers at the no-frills units of Deutsche Lufthansa AG and Air France-KLM Group.
Lufthansa, Air France-KLM and British Airways-parent IAG have all in the past two weeks posted quarterly earnings that beat estimates, while warning of a weakening in yields or fares as sales fail to keep pace with summer capacity increases. Ryanair posts earnings for the year ended March 31 on May 23.