"Many Photos" - EasyJet warns Brexit is triggering a summer slowdown

EasyJet has warned that Brexit uncertainty is now knocking demand for summer holidays too after it hit Easter breaks.

Britain's travel sector has already been hammered this year, as Easter bookings slumped when holidaymakers held off due to worries over Brexit and now there are fears that a hangover will hit summer breaks too.

The slide in overseas holiday and flight bookings comes despite the airline's assurances that whatever happens with Brexit it will be 'flying as usual'. 

Luton-based easyJet also confirmed investors' fears that it would report heavy losses for the first half of its financial year - owing to spiralling costs - leading its shares to take a tumble in early trading on Monday.

EasyJet warned today that its second half performance would be softer thanks to Brexit

The double-whammy disappointment triggered an 8 per cent decline in easyJet's shares to £10.30 and sent shockwaves through the broader airline sector as it stoked fears about the year ahead. 

EasyJet said it expects to report losses of £275million when it issues its half-year in May. 

While sales have revved up by more than 7 per cent to £2.34billion, thanks to increased capacity, its costs have rocketed by nearly 19 per cent.  

The airline has been stung by higher fuel prices and currency fluctuations, which have cost it around £37million and £8million respectively.  

The first-half numbers are broadly in line with expectations, but easyJet has lowered the bar for its second half. 

It said it is taking a more cautious outlook for the next six months as ongoing Brexit uncertainty puts people off booking summer holidays. 

Boss John Lundgren said:  'For the second half we are seeing softness in both the UK and Europe, which we believe comes from macroeconomic uncertainty and many unanswered questions surrounding Brexit which are together driving weaker customer demand.' 

The airline chief reassured investors, however, that the firm is all set for the UK's impending exit from the EU. 

'We are operationally well prepared for Brexit,' Lundgren said. 

'Now that the EU Parliament has passed its air connectivity legislation, together with the UK's confirmation that it will reciprocate, means that whatever happens, we'll be flying as usual.' 

AJ Bell investment director Russ Mould said the warning has sent 'shockwaves across the airline industry', adding to concern that 2019 could be a washout for the travel sector.

'People have been worried about the impact of Brexit on the aviation sector and there is lots of chatter that individuals are holding off from booking flights and holidays. 

'EasyJet insists that it will be 'flying as usual' whatever happens with Brexit, however these positive words may not be enough to solve its problems,' Mould said.  

Tour operators Thomas Cook and TUI have both issued profit warnings in the past six months amid various factors including a squeeze on margins and the grounding of certain Boeing planes. 

Tui said its annual profits would be dented by the grounding of the Boeing 737 Max aircraft

'Running an airline is a tough job,' Mould added, 'as there are often many factors outside of management control.  

'The delay to Brexit adds to the travel sector's woes as it prolongs consumer anxiety about whether to book a holiday or not.'

Earlier this month the operator pulled out of plans to form a consortium to bid for bankrupt Italian carrier Alitalia.

EasyJet said that following discussions with state-controlled railway Ferrovie dello Stato Italiane and Delta Air Lines about forming a consortium to 'explore options' for Alitalia, it has now withdrawn from the process.

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