Budget carrier easyJet is reducing its flying schedule as frequent changes in Government restrictions on travel have hit demand.
The airline now expects to fly slightly less than the previously planned 40 per cent of capacity during the three months to the end of September, the final quarter of its financial year. It has also said it is unable to give earnings guidance for either this fiscal year or the next.
Just last month, easyJet said it was encouraged by higher-than-expected bookings following the easing of restrictions to contain the coronavirus pandemic. As a result, it decided to expand its schedule for the current quarter.
Since then, new 14-day quarantine restrictions have been imposed on passengers arriving from countries including France and Spain. Seven Greek islands were added to that list yesterday.
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“Following the imposition of additional quarantine restrictions to seven Greek islands and the continued uncertainty this brings for customers, demand is now likely to be further impacted and therefore lower than previously anticipated,” chief executive Johan Lundgren said.
“We know our customers are as frustrated as we are with the unpredictable travel and quarantine restrictions.”
EasyJet is cutting 4,500 jobs across Europe and is closing its bases at London Stansted, London Southend and Newcastle airports. Mr Lundgren and others have called specific support for the aviation sector, including the removal of air passenger duty for at least 12 months and the lifting of air traffic control charges.
JD Sports has reinstated its annual financial guidance following an “encouraging” performance since its stores have re-opened with the easing of lockdown restrictions.
The UK’s biggest sportswear retailer said pre-tax profits slumped by 68 per cent to £41.5 million in the first half of the year. However, it is predicting that full-year profits will be at least £265m.
Initial performance in re-opened stores was boosted by a combination of pent-up demand and shoppers jumping on discounted stock. However, footfall in stores continues to be significantly weaker than historic levels in all regions, but particularly across Europe.
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“Some of the weakness in footfall has been offset through better conversion and higher average transaction values as those consumers who visited physical retail did so with greater intent,” the company said.
It added that it is also mindful that the UK’s transition period with the European Union ends at the close of December. The retailer is trying to establish a more permanent European supply chain infrastructure in preparation for this.
Willie Walsh, the chief executive of British Airways owner IAG, is handing over the controls to Luis Gallego at the group’s annual meeting being held today.
Mr Walsh has been head of BA since 2005, and of IAG since it was created in 2011 through the merger of BA and Spain’s Iberia. He is due for a final farewell package of £883,000, through Institutional Shareholder Services has called for the rejection of the group’s remuneration report.
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Mr Gallego, a Spanish insider who turned around Iberia, will be tasked with continued cost cutting while managing damaged relations with unions and politicians. The group is also seeking £2.5 billion in a rights issue to help it through the coronavirus crisis.
BA is set to shed 12,000 jobs and has set new terms for its long-standing staff. Unions are fighting these moves, which the UK Government has described as a “breach of faith” after the airline accessed state funds to pay wages during the crisis.
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