Easyjet suffers worst winter losses and sees trouble ahead for airlines

Easyjet airplanes are seen at Berlin's airport in Schoenefeld Germany

In their latest update released earlier today, the budget airline reported a headline loss before tax of £275million for the six months to March 31.

The revenue growth was led by capacity growth and a foreign exchange benefit, though negatively offset by, the 'impact of the move of Easter, the new IFRS 15 accounting standard and the annualisation of prior year benefits such as Monarch's bankruptcy and Ryanair cancelling a large proportion of its winter 2017/8 schedule in the United Kingdom, ' the company said.

Total revenue increased by 7.3% to £2.34bn, though revenue per seat - a key industry metric for determining an airline's profitability - dropped 6.3% to £50.71.

That compared with a smaller loss of £54 million in the same period of the previous year. We have also continued to make good progress on our strategic initiatives in holidays, loyalty, business and with data, said Johan Lundgren, easyJet Chief Executive.

As a result, the load factor at the airline decreased by one percentage point, to 90 per cent.

The airline said it had received one-off benefits in the corresponding period a year ago due to the bankruptcy of Monarch and Ryanair Holdings PLC "cancelling a large proportion of its winter 2017/8 schedule in the UK".

Lundgren's defence comes on the same day the airline released its financial results for the first half of the year.

"Cost control remains a major priority for easyJet".

Revenue per seat, a measure of pricing, is now expected to be "slightly down", the discount airline said in a statement Friday, after forecasting in April that it would be "slightly up".

"Even an encouraging improvement in customer numbers couldn't prevent the predicted fall in revenue per seat".

EasyJet said confusion surrounding Brexit is continuing to suppress ticket sales in its home market, contributing to the downward pressure on prices.

Full year headline cost per seat, excluding fuel at constant currency, is also expected to be down. This is not helped by the ongoing negative impact of Brexit-related market uncertainty as well as a wider macroeconomic slowdown in Europe.



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