EasyJet to Pull Planes From Venice, Naples on Demand Slump
EasyJet to Pull Planes From Venice, Naples on Demand Slump
(Bloomberg) -- EasyJet Plc will stop basing planes in Venice and Naples over coming months, pulling back from the Italian cities in a nod to flagging demand for air travel.
The low-cost airline will offer fewer flights to the popular leisure destinations during the winter season and serve them from other hubs, it said in an emailed statement on Wednesday. No flights will operate from the Venice base through March 27, EasyJet said, while it plans a restart in Naples on Dec. 17.
EasyJet cited the effects of the resurgent Covid-19 pandemic, which has led authorities to reimpose restrictions on travel throughout the region. Staff who are already on furlough will remain on an Italian program. EasyJet continues to consult with unions on broader staff cuts including in Germany, Portugal and Switzerland.
The decision is a sign of persistent weak demand at EasyJet, which already lowered a target for reaching 40% of capacity in the September quarter. Europe’s second-largest discount carrier -- one of the biggest operators at both Italian locations -- is scheduled to give a trading update on Thursday. It hasn’t offered a capacity outlook for the winter season that is under way now and carries through Easter.
EasyJet earlier closed several U.K. bases including Stansted to consolidate London-area operations at Gatwick and its Luton headquarters.
Case Counts
European airlines’ hopes that a bounceback in travel would build momentum toward the new year have been dashed by rising case counts and new restrictions in countries including the U.K., Spain and France. Italy, which successfully clamped down after suffering the region’s worst initial outbreak, has also seen the infection rate creep back up.
“We are cautious on demand due to uncertainty around travel restrictions and entering the off-peak winter period,” wrote Savanthi Syth, an analyst at Raymond James & Associates in an Oct. 6 note to clients. While improvements in testing could prompt a lifting of travel restrictions, she doesn’t expect traffic to increase until late in the first quarter of 2021.
Ryanair Challenge
EasyJet’s bigger rival in the discount market, Ryanair Holdings Plc, said last month that it would cut October capacity by a further 20%, in addition to a previous 20% cut. The Irish carrier, which also has a big presence in Naples, has railed against government restrictions, unsuccessfully challenging Ireland’s curbs.
What Bloomberg Intelligence says:
“EasyJet’s decision to temporarily close its bases at Venice and Naples is yet another signpost that travel demand could be weak this winter. With a significant portion of its fleet grounded, the airline could see revenue drop over 70% during the fiscal first quarter ending in December.”
--Rob Barnett, transportation analyst
EasyJet shares were down 3.4% at 3:15 p.m. in London. They have lost 63% this year.
Italy is the fourth-busiest European country for air traffic, based on passenger data from the International Air Transport Association. Venice Marco Polo and Naples International Airport rank fourth and fifth among Italian hubs, trailing Rome’s Fiumicino and two airports serving Milan, Malpesa and Bergamo.
EasyJet customers booked on flights no longer operating can transfer to an alternative for free, apply for a voucher or a refund, the airline said.
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