EasyJet hit by Paris attacks but sees sunnier skies ahead

EasyJet has revealed its revenues fell sharply in the wake of the Paris terrorist attacks that killed 130 people but struck a more upbeat tone on its prospects this year.

The airline said that revenue per seat fell by 3.7% between October and December, although total revenues for the first quarter were down by just 0.1% to £930 million.

The greatest impact was due to a fall-off in demand in the wake of the Paris attacks, but the cancellation of all flights to Sharm el-Sheikh in Egypt, due to security fears, was also a factor.

Flights to Sharm remain suspended until at least 27 May.

Shares in easyJet fell by 1% to 1614p, while rival airlines IAG and Flybe also saw their share prices track lower as investors feared similar impacts.

In the aftermath of Paris, revenue per seat was down in the high single digits in November and December, the airline admitted.

However, easyJet said that forward bookings for the second quarter were showing “a marked improvement”.

Total passengers flown in the first quarter was still 8.1% higher than at the same point in 2014, following the airline’s addition of more seats.

Chief executive Carolyn McCall said it would focus on reducing costs this year, to ensure an increase in profits and dividends.

EasyJet said that it would take advantage of the low cost of aviation fuel to increase its available seats by about 7% this year.

The airline estimates that its fuel bill for the full year is likely to be between £165 million and £180 million lower than it was last year.

It said it was on course to meet pre-tax profit forecasts of £738 million for the year, almost 8% up on 2015.

James Hollins, analyst at Nomura, said the French and Egyptian issues had been more damaging than expected “but these are relatively exceptional and short-term issues”.