EasyJet faces disruption from the ongoing conflict in the Middle East with important markets likely to see demand soften “significantly.”
Egypt is an important winter sun market for easyJet holidays, representing 2% of group seats in the first half of financial 2024, according to research from Barclays.
Combined with Israel constituting 1.3% of seats and Jordan constituting 0.2%, in total 3.5% of the airline's seats are for travel to and from the vicinity of the current conflict.
Moreover, given the very long stage lengths to these markets, routes to and from Egypt, Israel, and Jordan account for 10.1% of easyJet's available seat kilometres in the first half of financial 2024, the bank said.
“We expect travel demand to soften very significantly to the Egyptian Red Sea resorts and to Jordan, and we expect services to Israel to remain suspended for the immediate future,” Barclays added.
Barclays has lowered its rating on the budget airline operator to 'equal weight' from ''overweight and cut its price target to 415p from 550p.
Alongside, the Middle Eastern disruption it said: “New financial targets and growth plan show ambition, but whilst we see potential from holidays and upgauging we lack confidence that winter losses can be reduced.”
The bank’s financial 2024 and 2025 pre-tax profit estimates are 10% and 17% below consensus, respectively, it added.
Shares are down 1.1%.