Wizz Air Holdings PLC (AIM:WIZZ) and easyJet PLC (LSE:EZJ) are two airlines that operate in the same ‘discount’ market, dealing with similar macro-conditions surrounding airports and targeting a similar customer base.
However, while Wizz Air came out today and said passenger traffic grew to its highest level in almost seven years in June, easyJet is cancelling flights left, right and centre.
To add to matters, and seemingly going against the grain for airlines following recent and predicted chaos at major airports up and down the country, Wizz Air said earlier last month that it was on track for a “record summer.”
For easyJet, the problems continue to mount, with its chief operating officer Peter Bellew resigning over the airline cancelled thousands of flights this summer to limit the disruption caused to passengers (read more).
So, with one airline cancelling flights, and another on course for, in its own words, a “record summer,” why the apparent disparity between the two?
What is going wrong for easyJet?
For one, no airline has cancelled more flights n recent months than easyJet, according to Which?
In the first half of June alone, the provider had cut 528 flights from its schedule, significantly ahead of second-placed British Airways, which cut 106 over the same period.
To make matters worse, the flight cap set to be introduced at Gatwick for the summer months means the budget airline is set to cut thousands during the peak season of July, August and September.
As well as that, in the spirit of the British summer of strikes, easyJet staff in Spain will follow suit, planning three separate 72-hour strikes over the summer.
Spain is arguably one of the top destinations for easyJet travellers, especially from Britain, so the decision to strike will undoubtedly cause further chaos.
easyJet for some time has also always managed to achieve success on the back of its cheap service, despite it not being viewed in the most shining light by the people that use the service.
And despite leading industry experts believing that no permanent damage has been to easyJet, there will surely come a point where travellers have had enough and start to look elsewhere.
Now, it cannot be said conclusively, but that may be what we are seeing with Wizz Air’s numbers today and that formerly easyJet passengers have heard of the raft of planned cancellations and have finally decided to look elsewhere.
However, according to John Strickland, director at air transport consultancy JLS Consulting, despite the pre-planning more cancellations, external factors are largely to blame for its issues.
“They have needed to pre-plan more cancellations to increase resilience but have been hit by external factors such as localised ATC (Air Traffic Control) issues at Gatwick which is by far their largest airport for operations.”
What does this mean for the long-term future of easyJet?
Despite all the current issues the airline is facing and has been facing for the most part of the year, Strickland believes that no “permanent long-term damage” has been done to easyJet’s reputation when speaking about the issue towards the end of June.
“easyJet is not the only airline to take a battering in current media coverage,” Strickland said.
“It is well aware of its need to improve performance and is taking further action.”
For now, easyJet can weather the storm but if passengers get too frustrated and simply give up with the budget airline Peter Bellew might not be the only outgoing executive.
Shares today were down 5% at 357.3p, a new five-year low.