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Thursday, August 11, 2022

easyJet swings to a half-year loss as security fears hit travel

LONDON (Reuters) – British low-cost carrier easyJet (EZJ.L) swung to a half-year loss on Tuesday after attacks on European capitals and travel strikes put customers off from flying.

For the full-year easyJet said it remained on track to meet market expectations despite posting a pretax loss of 24 million pounds in the six months to March 31, which compared to the 7 million pounds of profit it made last year.

easyJet, Europe’s No. 2 low-cost carrier behind Ryanair (RYA.I), forecast that for the third quarter revenue per seat (RPS) would decline by around seven percentage points, partially due to the attacks in Brussels in March.

Airlines had already been keeping prices down to boost travel demand after attacks in November in Paris, one of the world’s most visited cities, deterred travellers.

Other European airlines including British Airways-owner IAG (ICAG.L), Lufthansa (LHAG.DE) and Air France-KLM (AIRF.PA) have all in recent weeks warned about the impact of tourist caution after the attacks on the two cities.

But easyJet said it remained confident on future growth, announcing plans to increase its dividend payout ratio by a quarter to 50 percent of post-tax income, subject to approval at its annual meeting.

That confidence came even as the airline said it was seeing a more competitive trading environment in European short-haul travel, with airlines cutting fares to reflect a low oil price and Ryanair adding new routes to compete directly with easyJet.

In its financial first-half, easyJet’s bottom line was also hurt by flight cancellations in Egypt and air traffic control strikes in France, which resulted in it not improving its half-year result for the first time since 2011.

Analysts are expecting easyJet to report pretax profit of 721 million pounds for the 12 months ended Sept. 30.

(Reporting by Sarah Young; editing by Kate Holton)

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