EASYJET faces a £200m hit after it today unveiled plans to cancel thousands of flights this summer as travel chaos in Britain deepened.
The low-cost airline today apologized for its part in the crisis that saw holidays ruined, but it also laid out plans to cancel thousands of flights.
With the aviation industry already in turmoil, the low-cost airline admitted it was unable to cope with an “unprecedented increase” in demand for flights. Gatwick and Amsterdam, its main airports, will be the hardest hit by cancellations.
Bernstein analysts believe the missed flights will cost easyJet between £100m and £200m this year, although the company declined to give an estimate.
If the analysts are right, that spells trouble for investors and customers.
Shares are down 10p to 426p today – down 48% this year.
Analysts in the city believe that more than 10,000 flights will be canceled by September. The government has been encouraging airlines to cancel flights early to give customers a chance to rebook.
But if easyJet’s move is copied across the industry, many thousands of holiday hopes are likely to be dashed.
Easyjet blamed delays in air traffic control and a lack of staff at airports and ground handling.
He added: “A very tight job market for the entire ecosystem, including the crew, compounded by increased ID verification times, has further reduced planned resilience.”
Johan Lundgren, CEO of easyJet, said:
“Providing safe and reliable operation for our customers in this challenging environment is easyJet’s highest priority and we regret that some customers have not been able to provide the service they have come to expect from us.
“While in recent weeks the action we have taken to increase resilience has seen us continue to operate up to 1,700 flights and transport up to a quarter of a million customers per day, the ongoing challenging operating environment has unfortunately continued to have an impact. which resulted in cancellations.”
Brexit has derailed hiring plans, says Lundgren, who says he has 129 trained cabin crew who cannot be hired because they await authorization from regulators.
The cuts mean EasyJet will operate around 90% of its pre-pandemic (2019) flights from July to September, down from its previous target of 97%.
Over the weekend, Gatwick said he would reduce the number of daily flights at the airport to 825 in July, down from 900. He said this would help passengers “experience a more reliable and better standard of service”.
Passengers who are informed of cancellations at least 14 days in advance are not entitled to compensation.
With rail workers about to start their biggest strike in 30 years on Tuesday, experts warn customers face a summer of travel misery that will extend far beyond the airlines.
Treasury Minister Simon Clarke said this morning that “it makes no sense to give false hope” that rail strikes can be avoided.