Budget airline EasyJet (EZJ) is under the cosh as it reports a number of pressures on its commercial and operational performance, and faces intensifying investor concern over the troubled travel sector.
The company says the Brussels attack and Egyptair tragedy, combined with significant disruption resulting from air traffic control strikes and congestion contributed to an underwhelming performance.
Runway closures at Gatwick airport and severe weather also took its toll, resulting in 1,221 cancellations.
Shares are 6.5% lower at 1,054p after the airline confirmed only 65% of expected bookings for its fourth quarter have been secured.
The number of passengers was up by 5.8% to 20.2 million in the third quarter, driven by an increased capacity of 21.9 million seats and load factor of 92%.
However, EasyJet’s total revenue per seat has declined by 8.3% at constant currency to £54.54 per seat, while total revenue in the quarter slumped 2.6% to £1,196 million. This is due to increased seat capacity being offset by the impact on yield of overall market capacity and cancellations.
Davy Research’s analysis is pessimistic, noting the ‘very challenging outlook’ and the broker expects further downward revisions to pre-tax profit forecasts.
It says due to events in the past week, the revenue per seat trajectory in the fourth quarter remains uncertain.
EasyJet hopes to bounce back from its downbeat trading by undertaking enhancements to its customer proposition in a bid to stimulate bookings.