Since the recent wave of terrorism Luton, England based EasyJet PLC (LN: EZJ) has suffered huge losses.
Following the bombing of a passenger plane in Egypt, EasyJet has cancelled all flights to Sharm el-Sheik for the foreseeable future. The British government also responded last year by banning all travel to the resort town.
Prior to the attacks the company had only cancelled 16 flights in total for the year due to inclement weather. In November 2015 alone EasyJet cancelled 378 flights, a stark contrast to previous numbers. Analysts are predicting these cancellations will cost the firm £45 million by June of this year.
Stock prices have dropped dramatically since the Sharm el-Sheik bombing. Prices are now hovering around 1400 per share, from a high of 17402.8 in October
In an effort to keep customers flying in light of domestic attacks, EasyJet has responded by cutting prices. Due to the recent drop in oil in a 12-year low, the firm’s expenses have only increased an additional 1% instead of the original 2% predicted.
Due to the worsening Russian economy EasyJet has also been forced to suspend flights between London and Moscow. Their Rome-Milan route saw flights reduced in response to competition drastically lowering prices making it less profitable. The carrier is instead focusing on less competitive routes that suit their low-cost model.
Despite concerns, EasyJet’s overall numbers have improved as the company continues to seek out new markets. Occupancy on the discount airline’s flights has increased by 1% with maintaining a load factor of 91.8%. EasyJet’s model of low cost, short-haul flights seem capable of weathering the loss of destinations like Sharm el-Sheik
