Brexit

easyJet: Drawn-Out Brexit Could Impact Earnings

Amid the pending withdrawal of the U.K. from the European Union (EU), easyJet noted that travelers are more reserved with their ticket bookings as the the future relations between Britain and the bloc are uncertain. Even with the company’s first-half loss within expectations, easyJet said its view is “more cautious” through September, the The Associated Press reported.

CEO Johan Lundgren of easyJet said, according to the report, “For the second half, we are seeing softness in both the U.K. and Europe, which we believe comes from macroeconomic uncertainty and many unanswered questions surrounding Brexit, which are together driving weaker customer demand. We are rolling out further initiatives to support our trading.”

Hargreaves Lansdown Analyst George Salmon noted that the airline is amid challenges with “two main moving parts,” which are customer sentiment and the price of fuel. Travelers are reconsidering the reservations amid the divorce with the EU, and profits are becoming impacted by the higher cost of fuel.

The news comes as the Chancellor of the Exchequer Philip Hammond noted, per a report in mid-March, that people would be worse off if the U.K. leaves the EU without a deal. Hammond said the move by Parliament to reject Prime Minister Theresa May’s deal created uncertainty, and a large disruption to the company’s economy would be created with a non-plan Brexit.

According to a report in Bloomberg, officials asked politicians to not back a non-deal Brexit in a Wednesday (March 13) vote. Hammond told Parliament that the vote leaves a “cloud of uncertainty” hanging over the economy, according to the report. “The idea that some readily available fix to avoid the consequences of a no-deal Brexit is just wrong.”

As it stands, the split by the U.K. from the EU has been controversial since the beginning, amid battles and arguments that have divided the country.

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