easyJet PLC (LON:EZJ) will cancel some of its European flights, particularly those to and from Italy, and has warned of slower demand across the continent as a result of the coronavirus outbreak.
The budget airline said it will also be implementing several other measures including budget cuts, pay freezes and offering unpaid leave to staff as part of its effort to reduce the impact of the outbreak on its bottom line.
READ: EasyJet expects smaller first-half loss despite cost surge
easyJet also said it will be reallocating its aircraft for the summer period to target the “highest revenue opportunities on market recovery”.
However, the firm added that it was “too early” to determine what effect the virus will have on its outlook for the current year and that it will “continue to monitor the situation carefully and will update the market in due course”.
The coronavirus outbreak, which originated in China but has since spread to multiple countries including Italy, the UK and the US, has infected over 83,000 people and killed around 2,800.
Travel groups such as easyJet have been particularly hard hit by the virus as travellers increasingly opt to stay home and avoid travelling through areas that may carry the risk of infection.
Broker predicts outbreak could cut profits by 50%
In a note, analysts at Peel Hunt said while the impact of the outbreak on demand was “unsurprising”, they were puzzled as to why there had been “no quantification of even the volume of flights that may be cancelled or the change in demand relative to the same period last year”.
The broker added that they expected “further weakness in the stock” and forecast that the cancellations could cut easyJet’s pre-tax profits by as much as 50%.
Shares in easyJet fell 4.7% to 1,057.5p in early trading on Friday.
--Adds broker comment and share price--