EasyJet already feeling the pressures of less traffic

EasyJet has maintained that its projected profits will remain accurate.  They are expecting to see only a small drop in percentage of airline travel during the winter.  EasyJet has noted that they were relying on increased travel during the summer months to help offset the decline in travel this winter.

A spokesperson for EasyJet said that “Whilst we expect industry capacity reductions over the winter to be in the region of 2 percent to 4 percent, it remains a volatile market and too early to anticipate the impact on yield of the capacity changes.” 

Some analyst fear that EasyJet is not cutting capacity enough and it may not be enough to offset the potential losses that they may incur. A statement released by Numis Securities said that “We remain concerned about the trading outlook over the winter as pressures on the consumer accumulate and the outlook for employment in the UK deteriorates.”

Over this past year EasyJet’s stock prices has been nearly cut in half.  EasyJet had planned to implement a new growth strategy during the winter months but has been forced to can the idea for now.  The spokesperson said that “Although easyJet is in our view doing the right thing by reining back growth this winter and also giving more certainty by raising the level of hedging, we maintain our ‘Sell’ rating.”

EasyJet is expecting to have cash reserves towards the end of September of around 900 million pounds.

www.easyjet.com