EasyJet warns Brexit will mean weak summer sales as consumers cut back on holidays

Budget airline has already said it expects to make a pre-tax loss of £275m in the first half of the year

EasyJet’s share price dropped 7 per cent on Monday after the announcement (Getty)

EasyJet warned that Brexit related uncertainty and a gloomy outlook for the economy have meant weak demand for this year’s peak summer season

The budget airline said it expects to make a pre-tax loss of £275m in the first half of the year because of rising costs and weak demand.

EasyJet’s share price dropped 7 per cent on Monday after the announcement, which had originally been planned for Friday.

“We are seeing softness in both the UK and Europe, which we believe comes from macroeconomic uncertainty and many unanswered questions surrounding Brexit which are together driving weaker customer demand,” said chief executive Johan Lundgren.

“We are operationally well prepared for Brexit. Now that the EU parliament has passed its air connectivity legislation, together with the UK’s confirmation that it will reciprocate, it means that whatever happens, we’ll be flying as usual.”

EasyJet expects revenue to rise by about 7.3 per cent to £2.3bn in the first half of the year, thanks to 14.5 per cent more capacity.

Revenue per seat – a key measure of an airline’s performance – is predicted to rise while there is expected to be a modest increase in cost per seat.

Fuel will have an adverse effect of around £37m, while foreign exchange will add a hit of around £8m.

Hargreaves Lansdown analyst George Salmon said the airline wasn’t doing much wrong.

“The issue is that with the two main moving parts (fuel prices and customer sentiment) both out of their control airlines are always open to external turbulence. EasyJet investors are finding that out the hard way,” he said.

“The group reckons demand will pick up later in the year, but a more pragmatic observer would say it’s difficult to put a timeframe on when Westminster and the EU27 will solve the Brexit puzzle. This uncertainty means easyJet requires some blue-sky thinking just now.”