EasyJet Issues Profit Warning

EasyJet Issues Profit Warning

Our second infographic featuring an airline’s cost analysis (direct from their own accounts) features easyJet, which is perhaps timely given that the carrier has recently issued a profit warning.

The timing of this coincided with the UK Brexit vote last week and whether this is coincidence or not is subject to almost as much debate as the vote itself! Factors cited are weather, strikes, operational issues and the EgyptAir tragedy. Here at Aviation Analytics we believe that the real reason is a little more straightforward. Competition!

Many of the markets that EasyJet used to dominate on are now being increasingly challenged by other LCCs and Ryanair is transitioning from a cheap and cheerful Ultra LCC operating from out-of-the-way airports to a serious player (with much uprated customer service)  on a growing number of more established routes from main airports. We expect this trend to continue.

EasyJet meantime has witnessed a slow but steady increase in its operating costs and now has a significantly higher cost base than Ryanair as is evidenced by our chart (although still competitive against the legacies). We have been seeing a worrying trend starting to emerge during the last 3-6 months through our Network View System (which analyses the entire network for fares, yields break-evens and a new “Standard & Poor” style rating for the strength of a route/base/country/carrier). For us this profit warning therefore comes as little surprise!