28 July 2010

Ash cloud cost easyJet around Ã&#pound;65m

EasyJet claims to be on track to report an annual pre-tax profit of between Ã&#pound;100m and Ã&#pound;150m.

It said despite the volcanic ash disruption, which caused 7,314 flights to be cancelled and the loss of an estimated Ã&#pound;65m, sales rose by 5.3% to Ã&#pound;759.2m in the three months to the end of June.

It said the ash cloud, which spread across Europe in April, had caused an 8% drop in passengers during the period.

Chief executive Carolyn McCall said: ââ¬ÅâœEasyJet has continued to deliver a good commercial performance in the quarter with total revenue up 5.3%.

"This was in spite of the challenges presented by significant disruption caused by volcanic ash and, more recently, the combination of air traffic control industrial action and crewing issues in some parts of our network.

ââ¬ÅâœWe have put a mitigation plan in place in response to these recent issues in order to minimise the future impact to our passengers and staff.ââ¬~

EasyJet said the financial impact of the volcanic ash cloud would have been only around Ã&#pound;20 million if "more appropriateââ¬~ flight restrictions had been in place.

It said it was very disappointed by the decision not to compensate airlines and intends to explore all options to secure compensation for the losses incurred.

The interim statement also said the airline was awaiting judgement in relation to the court case over the interpretation of the brand licence agreement with easyGroup IP.

ââ¬ÅâœFollowing the trial, easyGroupââ¬â¢s lawyers have sent a letter to easyJet purporting that its on time performance is in breach of the Brand Licence and have given the company 90 days to cure the alleged breach or it will have the right to terminate the Brand Licence," it said.

ââ¬ÅâœEasyJet is advised that that the Brand Licence does not impose or create any contractual obligation regarding on time performance and consequently easyGroup has no right to terminate the Brand Licence.ââ¬~ See earlier TravelMole story.


By Bev Fearis

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• Easy Jet - going downhill
  
  

  Easyjet may have delivered a good commercial performance but it's off the back of a rapidly deteriorating service to passengers. They have repeatedly cancelled flights (including mine) without prior notice recently, and without offering stranded passengers any practical assistance to find alternative flights. As a result Easyjet are facing a lawsuit in Germany, which I hope they lose. They will soon be on a par with Ryanair in the popularity stakes if they carry on like this.

  By gareth lyons, Wednesday, July 28, 2010