easyJet Share News (EZJ)

(Sharecast News) - EasyJet said it would cancel flights and introduce emergency cost cuts after the coronavirus outbreak caused a drop in demand for flights in and out of Italy and across Europe.
The FTSE 100 airline said the fall in demand and load factors for Italy was significant and that business was weaker in other European markets. EasyJet announced a series of measures in an attempt to mitigate the impact of the COVID-19 coronavirus on its business.

EasyJet said it would cut administrative spending; freeze recruitment, promotion and pay; and postpone non-critical capital spending. It will also offer staff unpaid leave, stop non-mandatory training and press suppliers for price cuts.

"While it is too early to determine what the impact of the COVID-19 outbreak will be on 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," easyJet said.

EasyJet has lost about a third of its market value in the past week as investors have panicked about the growth of the coronavirus in Italy and its potential to spread throughout Europe. Schools, universities and businesses have shut down in northern Italy, which is suffering one of the biggest coronavirus outbreaks outside Asia.

EasyJet shares fell a further 3.7% to £10.69 at 08:24 GMT.

The company announced its actions as British Airways owner International Airlines Group said the coronavirus outbreak meant it could not give accurate guidance for 2020 results.

Neil Wilson, chief market analyst at Markets.com, said: "The question is how long this will last and how much damage will be done. Investors will be concerned that neither [easyJet nor IAG] yet can provide any guidance. You could see a complete wipeout to the European summer season if the situation deteriorates in Italy and we, for instance, see a similar surge in cases across France."

EasyJet said it had a working group spanning its business that meets daily to make sure processes and policies are effective. It said its plan for dealing with communicable diseases is based on the SARS epidemic and other global health emergencies.

"EasyJet is working closely with authorities and are following the guidelines provided by the World Health Organisation and EASA to ensure the health and wellbeing of our people and customers," the company said.

EasyJet said it would reorganise its summer 2020 flights to maximise revenue for when the market recovers.