EasyJet warns of softening demand in wake of coronavirus

LONDON (Reuters) – British budget airline easyJet (EZJ.L) warned on Friday it had seen a “significant” softening of demand into and out of its northern Italian bases and a reduction across its other European markets due to coronavirus.

As a result it will be cancelling some flights, it said, particularly those into and out of Italy, while continuing to monitor the situation and adapting its flying program to support demand.

easyJet also said it would seek cost savings across the business to help mitigate the impact of the virus.

The airline said it was too early to determine what the impact of the outbreak will be on its current year outlook and guidance for both the airline and holidays business.

“We continue to monitor the situation carefully and will update the market in due course,” it said.

In the meantime it will focus on achieving operational efficiencies and cost savings.

These include budget cuts in administrative areas and discretionary spend, a freeze in recruitment and pay, the postponement of non-critical project and capital expenditure, and a halting of non-mandatory training.

easyjet also plans to reallocate aircraft for summer 2020 to maximise revenue opportunities from any market recovery.

Shares in the airline, down 22% so far this year, closed Thursday at 1,110 pence, valuing the business at 4.42 billion pounds ($5.74 billion).

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