EasyJet has long been known as the number one budget airline with the likes of Ryanair and WOW airlines chasing their numbers. This past year, all of that has changed. EasyJet has had to adjust their expected profits for the upcoming fiscal year by as much as 35%. There have been several reasons for this, as we will discuss.
The main issue seems to be Brexit, with the pound at a 30-year low against the US dollar. EasyJet has noticed people aren’t traveling as much as their trips are more expensive with the weaker pound. There’s also the unfortunate reality that this year has been awful with terror attacks on many popular destinations, so in addition to that, travelers are afraid.
With destinations like France and Belgium, which are usually popular places year round, the numbers simply aren’t there. Even with reduced fares, which has been profitable, the load factor of each flight is down by about 2% compared to this time last year.
Fuel costs are an issue as well, as the cost of fuel continues to rise, combined with a weaker pound it is a bit harder to keep their prices down. However, EasyJet seems to feel this is a blip, and as Brexit settles down, and people start to feel more in the holiday mood, we will see an uptick in the numbers.
There are the six months that remain between autumn and spring, when travelers are ready to book trips again, so EasyJet could easily see their numbers go better than they predict. With the volatile travel market as of late, we will have to keep an eye out.
