easyJet, IAG and Ryanair woes over the UK Brexit vote and hit to their businesses

Date added: 28 June, 2016

Shares in easyJet have lost value since the Brexit vote, and the airline said its profits would be hit by Britain’s decision to leave the EU. There would be continuing economic and consumer uncertainty, partly about the membership of UK airlines in the single European aviation market. easyJet expected its profits to be £28 million lower than earlier expected, in the third quarter of 2016, and revenue in the second half of 2016 would be lower. Revenue per seat might be 8.6% down in the third quarter of 2016. easyJet said the weaker £ against the € and the $ would make foreign trips more expensive for Brits, and the low cost airlines would have to cut fares in order to attract them. That means cutting airline profits. Carolyn McCall, easyJet CEO, is urging the European Commission to prioritise British airlines remaining part of the EU aviation area “given its importance to trade and consumers”. (ie. given its importance to airline profits). The value of IAG shares fell on the Brexit result, and they issued a profit warning, as the economic slowdown likely in the UK would reduce air travel demand. Ryanair’s share priced also fell. It says it will not deploy new aircraft on routes to and from the UK next year, following the Brexit vote, and will instead focus on the European Union. At present, UK passengers are about 40% of Ryanair’s total. They expect the period of “considerable uncertainty” to last for many months.
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Easyjet and Foxtons warn of Brexit impact

27 June 2016 (BBC)

Airline Easyjet and estate agent Foxtons have issued warnings about the impact of the UK leaving the EU on their businesses.

Easyjet said the vote meant “additional economic and consumer uncertainty is likely this summer” and it expected revenues to fall as a result.

Shares in the carrier sank 15% after its statement.

Foxtons said it expected profits would be “significantly lower” in 2016 from a year earlier, and its shares dived 20%.

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In addition to the uncertainty caused by the EU referendum vote, Easyjet said trading conditions in May and June had been “extremely challenging”.

It said strikes in France, severe weather and issues at Gatwick had hit demand, and meant pre-tax profits in the third quarter had been hit by £28m.

The airline said that the uncertainty caused by the referendum result meant “revenue per seat at constant currency in the second half will now be down by at least a mid-single digit percentage compared to the second half of 2015”.

“In addition, recent movements in fuel prices and exchange rates are now expected to add around £25m of additional cost in the year to that guided at the half-year results.”

… and it continues …. about Foxtons …..

http://www.bbc.co.uk/news/business-36638101

Ryanair: ‘To focus growth on European Union’

27 June 2016 (BBC)

Ryanair will not deploy new aircraft on routes to and from the UK next year, following the Brexit vote, and will instead focus on the European Union.

The Irish low-cost airline, will “pivot all of our growth into the European Union,” chief executive Michael O’Leary told the Wall Street Journal.

Ryanair carries more than 100 million passengers a year and UK routes account for 40 million of those travellers.

Ryanair has its largest hub at London’s Stansted Airport.

The airline’s shares have fallen more than 23% since the United Kingdom voted on Thursday to leave the European Union.

Mr O’Leary, one of the most vocal business leaders campaigning in favour of continued EU membership, had repeatedly warned he would cut investment in Britain if it voted to leave.

He said the airline’s overall growth targets remained unchanged.

Mr O’Leary said he expected three or four months of “considerable uncertainty” due to the British vote, but forecast a limited impact on near-term bookings to and from Britain.

http://www.bbc.co.uk/news/business-36646837

easyJet, IAG and Ryanair woes over the UK Brexit vote and hit to their businesses

Easyjet and Foxtons warn of Brexit impact

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Ryanair: ‘To focus growth on European Union’

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