With Brexit set on autopilot and seemingly heading direct to No Deal, budget airline easyJet can see turbulence ahead.
The company told investors that higher fuel costs and increasing overheads per seat, paired with passengers’ unwillingness to risk booking a holiday during the current political crisis, had damaged business and led to losses.
Although management reassured shareholders that the airline is “operationally well prepared for Brexit” shares still fell 8% after the latest earnings announcement.
But what do the passengers think? YouGov BrandIndex data shows that over the last year all brand health tracking measures had sunk and remained low, but are now slowly on the rise; perhaps suggesting that management are right to be optimistic about the next half.
EasyJet’s Buzz score (a net measure of whether consumers have heard anything positive or negative about the brand in the last fortnight) sunk from +2.2 in May last year to -2.3 in July and has struggled to recover, but rose to +0.1 in the last week.
It’s a similar story when looking at easyJet’s Current Customer scores (whether someone has flown with the airline in the past 12 months) which seem to support CEO Johan Lundgren’s assertion that customers are waiting for the Brexit uncertainty to dissipate. EasyJet’s Current Customer scores peaked in October (+19.6) and January (+19.2) but have since followed a downward trend to +16.7, indicating that customers are indeed waiting.
However, easyJet’s Consideration score (whether someone would consider purchasing from the brand in future) has fluctuated often over the last year, sinking to lows scores of +36 and highs of +40. However since January Consideration scores have increased noticeably from +36.5 to +39.2 this week – last achieved in September and April last year, suggesting that the desire to fly with the budget liner is still existent and now growing.
YouGov’s monthly Consumer Confidence Index also shows that confidence in business activity over the past month and predicted for the next year has increased (scores rose from 112.9 in February to 114.0). These findings alongside easyJet’s growing Consideration score would suggest that although many businesses are struggling during this politically turbulent time, the appetite for budget airlines will always exist.