Low-cost airline EasyJet (EZJ) has issued a profit warning amid a sharp rise in flight cancellations and the expected economic and consumer uncertainty of Brexit.
A fall in consumer demand, massive operational disruption and the Egyptair tragedy have reduced third quarter pre-tax profit by £28 million.
Revenue per seat in the second half will fall by at least a mid-single digit percentage, while the recent recovery in fuel prices, together with a drop in the pound, will add £25 million of additional costs this year.
Shares in EasyJet crash 16% to £11.04.
European airlines have suffered strike action by French air traffic controllers, runway and congestion issues at Gatwick and severe weather.
In June to date EasyJet has received over 700 cancellations, compared with 487 in June last year.
The news follows a profit warning from British Airways owner International Consolidated Airlines (IAG), which saw weaker-than-expected trading in the run-up to the Referendum.
HSBC has downgraded the entire European airlines sector to ‘reduce’, warning of weaker demand and more capacity wars in Europe post-Brexit.
The Referendum has put a big question mark over international agreements governing air traffic rights to and from the UK.
Shares in EasyJet are down 37% year-to-date.
