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easyJet (EZJ) has joined peer Int. Consolidated Airlines (IAG) with a Brexit-inspired profits warning that sees its shares sharply lower again today, down another 15% after giving up 14% on Friday. This comes as the airline appears to capitulate in the face of mounting issues with Friday’s Brexit vote potentially being the straw that broke the budget airline’s back. A gloomy outlook for Q3 results (PBT hit by almost £30m, costs £25m higher than anticipated after oil price bounce and GBP plunge; H2 rev per seat down mid-single digit percentage) comes after a widely flagged and challenging May-June period, impacted by over one thousand cancelled flights (700 in June alone, 300 in the last 7 days) on account of French strikes, Gatwick congestion and severe weather. However, the company now sees already-dented traveller confidence in the wake of terrorist incidents being further impacted by reduced consumer confidence following the UK’s vote to leave the European Union which is seen having economic, financial and political ramifications that are difficult to measure. Shares trading fresh 3yr lows.
Mike van Dulken, Head of Research, 27 Jun
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