Paris - EasyJet said it’s confident demand for travel will recover from Friday’s terrorist attacks in Paris over coming weeks and months, forecasting a 7 percent gain in 2016 passenger numbers and ordering 36 new aircraft with a list price of almost $3.8 billion pounds.
“People will want to continue to live their lives, and traveling is part of that,” CEO Carolyn McCall said Tuesday in an interview after announcing record annual earnings. While the airline expects a short-term impact, “things will get back to normal” in the medium to long term, she said.
Europe’s travel sector faces its greatest challenge for years following the Paris atrocities, which came two weeks after the downing of a passenger jet over Egypt that Russian President Vladimir Putin said Tuesday was caused by a bomb. EasyJet has 20 percent of its capacity in France and also serves Egypt.
The UK airline saw an increased level of “no-shows” on flights to France over the weekend, McCall said. It still expects travelers to remain largely undaunted by the threat from Islamic State - which has claimed responsibility for both the Paris and Egypt events - she said, citing passenger behavior after the Sept. 11, 2001, attacks on the US and the June 7 bombings in London.
Special dividend
The carrier didn’t mention a special dividend, which “will disappoint some,” said Mark Irvine-Fortescue, an analyst at Jefferies in London who had expected a payout of 150 million pounds ($228 million). EasyJet traded down 3.5 percent at 1,720 pence as of 10:40 a.m. in London. The stock is up 3 percent in 2015.
EasyJet ordered 30 Airbus Group SE A320 aircraft, converted from options held since 2013, plus six upgraded New Engine Option variants. Ten of the planes, which will be delivered from 2018, will replace older aircraft, with the rest adding capacity, the CEO said.
The deal takes the Luton, England-based carrier’s order backlog to 186 aircraft, plus 100 unexercised purchase rights. McCall said the Neo version of Airbus’s biggest A321 narrow-body remains a candidate for purchase.
Sinai costs
EasyJet expects to take a hit of less than 10 million pounds from the evacuation of 4 500 passengers from Sharm el- Sheikh after the UK government banned scheduled flights amid security concerns following the loss of the Metrojet plane after it departed the Red Sea resort. The figure will cover costs including accommodation and expenses.
The carrier scrapped its only route to Tunisia following an Islamist attack in Souse in July, and plans to review levels of demand to Sinai once the flight ban is lifted.
Pretax profit in the fiscal year ended Sept. 30 rose 18 percent to 686 million pounds, Easyjet said in a statement, the sixth straight year of record earnings. Passenger numbers rose 6 percent and 91.5 percent of seats were filled.
Like larger discount competitor Ryanair Holdings, EasyJet gained customers in the summer as the wettest August in a century encouraged Britons into a spate of late bookings.
-With assistance from Kari Lundgren and Anna Edwards.