EasyJet Falls as U.K. Carrier Cuts Capacity, Drops Guidance

(Bloomberg) -- EasyJet Plc fell as much as 8.2% after the latest U.K. curbs on international travel forced the discount carrier to slow the build-up of its summer flight schedule.

Britain’s biggest discount airline, which had been been planning to fly at 40% of normal capacity in its current fourth quarter, now expects to operate at slightly less than that, it said in a statement on Tuesday. Coronavirus cases are on the rise in some European countries including important holiday destinations like Greece, France and Spain.

EasyJet also dropped a forecast for a smaller loss this period than in the third quarter through June, when it had a shortfall of 324 million pounds ($426 million). It will provide no financial guidance for the fiscal year starting next month.

“Demand is now likely to be further impacted and therefore lower than previously anticipated,” Chief Executive Officer Johan Lundgren said in the release. “It is difficult to overstate the impact that the pandemic and associated government policies has had on the whole industry.”

Greek Islands

U.K. Transport Secretary Grant Shapps on Monday announced 14 days of self-isolation for travelers arriving from islands including Crete and Santorini. While the introduction of a regional approach, which avoided limits on the Greek mainland, was welcomed as less severe than blanket quarantines, the move adds to confusion and complexity around where people can fly unhindered.

EasyJet shares traded 4.9% lower at 597.6 pence as of 8:31 a.m. in London, taking the decline this year to 58% and valuing the company at 2.73 billion pounds.

Lundgren repeated calls for sector-specific support for aviation, including the removal of the air passenger duty tax for 12 months, alleviation of air traffic control charges and the extension of a waiver of use-them-or-lose-them airport slot rules.

U.K. aerospace supplier Meggitt Plc separately reported adjusted operating profit for the first half that was 37% lower than the prior year due to a worsening hit to revenues at its key aerospace business.

Signature Aviation Plc, which provides bases for business jets, reported a 60% drop, while saying that flight activity was down by only a fifth in August. That suggests demand for private operations is returning faster than for commercial services.

©2020 Bloomberg L.P.