Shares in budget airline EasyJet (EZJ) tumbled 6.6% to 587p after it cut the number of planes and passengers it plans to fly in the fourth quarter of this year.
Citing a reduced demand for travel, continued uncertainty and a lack of visibility on customer bookings, in a capacity update EasyJet said it now expects to fly slightly less than previously planned, with its continued schedule thinning part of the company’s plans to focus on profitable flying.
It comes as other airlines also note little visibility on customer demand. Jet2 owner Dart (DTG:AIM) for example said in an AGM update that winter bookings this year have yet to match its revised on-sale seat capacity, with customer bookings ‘displaying a shorter lead time than in previous years.’
Investors were also likely to be less than pleased as EasyJet suggested it could come back to the market for more cash, saying it would ‘continue to review its liquidity position on a regular basis to assess any further funding opportunities.’
EASYJET SLAMS ‘CONSTANTLY EVOLVING’ RESTRICTIONS
The airline criticised ‘constantly evolving’ Government restrictions across Europe and quarantine measures in the UK, including yesterday's announcements that removed seven Greek islands from the exemption list, adding that customer confidence to make travel plans has been negatively affected.
The move to cut its schedule shows the volatile nature of the sector’s recovery, and comes just a month after EasyJet had expanded its flight schedule to 1,000 flights a day following better than expected demand.
EasyJet’s CEO Johan Lundgren said, ‘It is difficult to overstate the impact that the pandemic and associated government policies has had on the whole industry.
‘We again call on the Government to provide sector specific support for aviation which needs to take the form of a broad package of measures including the removal of [Air Passenger Duty] for at least 12 months, the alleviation of [Air Traffic Control] charges along with continuation of the slot rule waiver.’
