November 20, 2018 / 7:51 AM / 24 days ago

easyJet ready for Brexit as summer bookings rise

LONDON (Reuters) - Uncertainty about Brexit negotiations are not hurting sales at easyJet (EZJ.L), CEO Johan Lundgren said on Tuesday, adding the British budget airline is well-prepared should the UK leave the European Union without a deal next March.

Bookings for around that time have not seen any drop-off and those for next summer are slightly ahead of summer sales a year ago, Lundgren said.

“There doesn’t seem to be any concern for people to book their holidays and go away for next summer,” easyJet CEO Johan Lundgren told the BBC.

“We’ve been preparing ourselves for the past two years for any scenario, a deal or a no deal,” he added.

Larger rival Ryanair (RYA.I) has warned that depending on the deal reached, Brexit could force carriers to ground flights.

As well as setting up a new airline in Austria, Lundgren said that by the time the UK leaves the EU next year, easyJet aims to have over 50 percent of its shareholders from outside the UK and from other EU countries, up from 47 percent currently, to enable it to comply with EU rules.

“What me and Andrew (Findlay, CFO) are going to do right now after today is continue to go and see European shareholders and talk to them about the story of easyJet,” he said.

EASYJET PULLS AHEAD

That story has over the last year has been one of easyJet outperforming its rivals.

The airline reported a 41 percent jump in annual profit on Tuesday, helped in part by the collapse of smaller rival Monarch and cancellations and strikes at Ryanair, which last month issued a profit warning.

Signaling its confidence in its future performance, easyJet lifted its full-year payout by 43 percent, despite turbulence in the wider industry.

Over 2018, higher oil prices have pushed some smaller European airlines, Cyprus’s Cobalt Air and Denmark-based Primera Air, out of business, while British regional carrier Flybe (FLYB.L) has put itself up for sale after warning on profit.

Lundgren said that easyJet was always looking for strategic opportunities but Flybe was not currently one of them.

“We have no interest in Flybe at the moment,” he told reporters, adding that easyJet had a strong balance sheet.

“We’re well-hedged and in a stronger position than others to mitigate the higher fuel price environment,” he said.

FILE PHOTO: An EasyJet Airbus A321neo aircraft is parked at Gatwick Airport before a special flight to Farnborough International Airshow in Farnborough, Britain, July 18, 2018. REUTERS/Sarah Young

Despite last year’s performance and its confidence on summer 2019 bookings, easyJet stuck to a forecast for first-half revenue per seat to fall by low to mid-single digits.

Its shares were down 5.5 percent to 1,110 pence at 1305 GMT, as analysts said this year would be trickier than last.

“easyJet has made significant preparations for Brexit but overall the market faces uncertainties on higher fuel costs and a likely pick-up in increased competitor capacity,” said aviation consultant John Strickland.

Reporting by Sarah Young; editing by Kate Holton and Jason Neely

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