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* 'Significant' softening of demand in and out of Italy
* Slower demand across other European markets
* Too early to determine impact of virus on full-year
outlook
* Seeks savings across business to mitigate impact
(Adds details, shares)
LONDON, Feb 28 (Reuters) - British budget airline easyJet
said on Friday it would cancel flights and cut costs
across its business after the coronavirus outbreak hit demand
for travel to Italy and other European markets.
The short-haul airline, which operates predominantly in
Europe, said it was too early to determine what the impact of
the outbreak would be on its outlook for the current year nor
its guidance for either the airline or its holidays business.
Its shares fell 4.6% in early trading, extending losses for
the year to 26% and underperforming the broader market.
EasyJet said it had seen a "significant" softening of demand
into and out of its northern Italian bases and a reduction
across its other European markets following the increased
incidence of coronavirus.
As a result it will be cancelling some flights, particularly
those into and out of Italy, while continuing to monitor the
situation and adapting its flying programme to support demand,
the airline said.
Coronavirus, which emerged late last year in China, has hit
demand for travel around the world in recent weeks as the
outbreak has spread.
Separately on Friday, British Airways-owner IAG
said coronavirus would hit earnings this year but the rapidly
evolving nature of the outbreak meant it could not say by how
much. Its shares were down 7%.
EasyJet said it would look for cost savings across its
business to help mitigate the impact of the virus.
"We continue to monitor the situation carefully and will
update the market in due course," it said.
Budgets would be cut in administrative areas and
discretionary spending while recruitment, promotion and pay
would be frozen across its network.
All non-critical project and capital expenditure will be
postponed, as will non-mandatory training, the airline said.
EasyJet also plans to work with suppliers to further reduce
costs and will reallocate aircraft for summer 2020 to maximise
revenue opportunities from any market recovery.
($1 = 0.7696 pounds)
(Reporting by James Davey; Editing by Kate Holton, Costas Pitas
and David Clarke)
