Last week’s deadly attack in Nice and attempted coup in Turkey have created fresh turmoil for European airlines already grappling with the fallout of Brexit — easyJet said it was unable to give an earnings forecast and Lufthansa issued a warning on profit.
EasyJet, Europe’s No 2 low-cost carrier behind Ryanair, has in the past given a forecast profit range for the 12 months to the end of September at this time of the year.
However, now it says security worries, weaker consumer confidence, and currency volatility were all dragging on its peak summer season.
Lufthansa had said its core earnings for 2016 would be below last year’s, downgrading its previous forecast.
The German airline blamed repeated attacks in Europe which have dampened advance bookings for long-haul travel to the continent, plus what it called greater political and economic uncertainty since March.
Shares in Lufthansa slumped 7.5% yesterday, while those of easyJet were down 6% at one stage.
While Lufthansa did not refer to specifics, easyJet said last week’s truck attack in Nice that killed 84 people, and a failed coup in Turkey, would affect its fiscal fourth quarter, though it couldn’t say by how much.
EasyJet chief executive Carolyn McCall also cited Britain’s vote last month to leave the EU, plus easyJet’s high level of cancelled flights due to air traffic strikes in France. In June, after the Brexit vote, Aer Lingus and British Airways owner IAG also warned on profit.
Analysts currently expect easyJet’s pretax profit for the year ending September 30 will drop 14% to £592m (€706m). Its bigger rival, Ryanair has this year also seen bookings dampened by security concerns, but at its last update in May, it was still expecting profit growth of 13% for the year ending March 2017.
Ryanair has proportionately less exposure than easyJet to both France and Britain.
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