EasyJet Tumbles in Wake of Brexit Vote

Fellow operators IAG and Ryanair also lose value due to overall travel concerns.

British air carriers’ stock prices were sent plummeting after the British Referendum vote as airlines lowered their earnings projections for the near future. Bloomberg reports that the nation’s main carriers have each taken a hit due to concerns of economic uncertainty and air traffic laws after departure from the European Union.

The hardest affected of the group is British low-cost carrier easyJet, as their stock prices fell by as much as 24 percent since the “Brexit” vote was announced on Friday, June 24. IAG, which operates British Airways and Spanish airline Iberia, also dropped by 23 percent in the same day, and Irish low-cost carrier Ryanair lost 12 percent of their stock value after the announcement.

Executives at easyJet say that their attention now turns to maintaining their business model in a separated United Kingdom, which relies on Britain participating in a single European aviation market. If Britain were to be excluded from the marketplace, experts worry that taxes and tariffs could cause a price increase on flights.

“We remain confident in the strength of easyJet’s business model and our ability to continue to deliver our successful strategy and our leading returns,” Carolyn McCall, CEO of easyJet, said in a statement. “We have today written to the UK Government and the European Commission to ask them to prioritize the UK remaining part of the single EU aviation market, given its importance to trade and consumers.”

In their statement, IAG expressed concerns of an “absolute profit increase” after the results were announced. However, the operator of Britain’s flag carrier was optimistic that that the fall after the vote only represented a small downturn and would not create a long-term problem. Ryanair did not release a statement about the referendum.

The hits were not limited to carriers in Great Britain and Ireland. The stock price for Hungarian carrier Wizz Air, which does nearly 20 percent of their business in the U.K., dropped 22 percent after the announcement. Other airlines with significant operations in Britain, including Air France-KLM and Lufthansa Group, also experienced declines.

[Photo: WIKIMEDIA COMMONS]