No-frills carriers show caution following the UK vote to quit the EU. Ian Taylor reports


Ryanair to focus on growth in EU instead of the UK


Ryanair forecast the UK vote to quit the EU would depress fares “until at least the end” of next year and said it would cut capacity at Stansted.


In a statement issued on


Monday with results for the three months to June, Ryanair said: “We will pivot our growth away from UK airports and focus more on growing at our EU airports over the next two years. “This winter we will cut capacity


and frequency on Stansted routes, although no routes will close.” The carrier described the


referendum result as “a surprise and a disappointment” and said: “We expect a considerable


CAPACITY: Ryanair will cut frequencies on winter routes from Stansted


“We will pivot our growth away from UK airports and focus more on EU airports”


period of political and economic uncertainty in both the UK and the EU [which] will be damaging to economic growth and consumer confidence. “Until some clarity emerges


about the UK’s long-term political and economic relationships with the EU, we can’t predict what effect it will have on our business and regulatory environment, but we


Wizz Air halves expansion plans due to weak sterling


Europe’s third-largest no-frills carrier Wizz Air is to halve its planned expansion in the UK for the rest of its financial year in light of the weakness of the pound following the EU vote. In a statement, Wizz Air said:


“The decision to leave the EU has led to a notable weakness in fares [in euro terms] on routes to/from the UK mainly due to the weaker British pound. “Wizz Air has already started


readjusting its network and halving its intended second-half [October to March] growth to the UK and redeploying this capacity to other non-UK routes.” The carrier operates from eight


UK airports, with an extensive schedule from Luton and flights from Aberdeen, Birmingham, Bristol, Belfast, Doncaster/ Sheffield, Glasgow and Liverpool. For the three months to June 30,


Wizz Air reported a 7% fall in average revenue per passenger to €63.40 despite a small increase in ancillary revenue. It attributed the decline to lower fuel prices and fact that the non-Orthodox Easter fell in March. Passenger numbers rose almost


18% year on year and revenue almost 10% in the quarter, with chief executive Jozsef Varadi hailing “a record first-quarter financial performance”.


have contingency plans in place for all eventualities. “In the near term we expect


Brexit uncertainty will lead to weaker sterling, slower growth in the UK and EU economies, and downward pressure on fares until the end of 2017 at least. “Over the longer term, if the UK


is unable to negotiate access to the single market/open skies it may have implications for our three UK domestic routes…but these risks are not material and will be manageable.” Ryanair noted: “There may


also be some opportunities if our


EasyJet warns of ‘difficult’ times as revenue falls 8%


EasyJet warned of a “difficult and uncertain economic and operating environment” despite reporting a near-6% rise in passengers during the three months to June. The carrier blamed an


8.3% fall in revenue per seat on “overall market capacity and cancellations”, noting: “Commercial operational performance during the quarter was impacted by the Brussels attack and EgyptAir tragedy, significant disruption due to air traffic control strikes and congestion, runway closures at Gatwick and severe weather leading to 1,221 cancellations.”


UK-registered competitors are no longer permitted to operate intra-EU routes or must divest their majority ownership of EU-registered airlines.” The carrier reported a 4% rise


in profits to €256 million for the three months despite a 10% fall in average fares to €39.92, saying costs had fallen 9% year on year. Passenger numbers were


up 11% to 31.2 million. Chief executive Michael O’Leary noted: “Market volatility arising from terrorist events and repeated air traffic control strikes weakened fares on close-in bookings.”


EasyJet suggested overall capacity on beach routes was up 14% year on year. Chief executive Carolyn


McCall described the operating environment as “difficult”, saying the factors above “combined with industry capacity growth in short haul continue to have an impact on industry yields”. She added: “Currency volatility


as a result of the UK’s decision to leave the EU, as well as recent events in Turkey and Nice, continue to impact consumer confidence.” The carrier noted “cooling demand across the network due to the effects of terrorism” and said the shift in capacity from the Middle East and North Africa to the western Mediterranean was “resulting in high hotel prices and an over-supply of seat capacity that is reducing yields in those markets”.


28 July 2016 travelweekly.co.uk 71


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