EasyJet warns of Brexit impact as revenue declines amid terror attacks and strike action

EasyJet reported a decline in revenue in the third quarter, as the budget airline was beset by a number of issues, including industrial action in France, currency volatility and terrorist attacks.

In the three months to the end of June, the FTSE 100-listed carrier posted a 2.6% year-on-year drop in revenue to £1.19bn, falling short of analysts' forecast for a £1.22bn figure. Total revenue per seat, a crucial measure of earnings for airlines, tumbled 7.7% from the corresponding period in 2015 to £54.54.

Like its main rival Ryanair, easyJet has been forced to cancel a number of flights due to industrial action by French air traffic controllers, who have gone on strike 13 times in the past 15 weeks. Terrorist attacks in France and Turkey combined with adverse weather and runway closures at London Gatwick Airport compounded the company's problems.

"These factors combined with industry capacity growth in short haul continue to have an impact on industry yields at a peak time of year," said group chief executive Carolyn McCall.

"More recently currency volatility as a result of the UK's referendum decision to leave the European Union as well as the recent events in Turkey and Nice continue to impact consumer confidence."

Britain's decision to vote in favour of leaving the 28-country bloc could cause significant disruption to airlines, the majority of which strongly campaigned in favour of remaining in the EU.

McCall insisted the carrier's business model remained robust but easyJet admitted its fourth quarter outlook remained uncertain, following the pro-Brexit vote and the recent events in Turkey and Nice, which have affected consumer confidence.

"This combined with industry capacity growth in short haul continues to have an impact on industry yields at a peak time of year," the company said. "As a result of events in the last week the revenue per seat trajectory in the fourth quarter remains uncertain."

Like its competitors, easyJet has benefitted from the creation of a single EU aviation market in the 1990s that allows airlines to operate services on any route within the bloc. However, Brexit could threaten the deregulated status of the aviation industry and flying to and from Europe could become a lot more expensive.

Last month, easyJet confirmed it spoke with European aviation regulators about obtaining an air operator's certificate, which would allow the airline to transfer its legal HQ abroad, and it has since begun a formal process to secure the licence.