EasyJet seat sales cause an airline sell-off

SHARES across Europe’s biggest carriers plunged yesterday after EasyJet warned of the impact of a price war.

EasyJet dropped 5.9pc, British Airways owner IAG plunged 3.9pc and Lufthansa 8.6pc after EasyJet said it expects revenue per seat – a measure of fares – to fall by 2pc in the six months to September. Air France and Air Berlin shares also dropped by 8.3pc and 2.2pc respectively.

Like most airlines, low fuel prices have seen EasyJet raise capacity, driving down fares for passengers.

But while the airline raised its profit forecast to a range of £380m to £420m yesterday – above the analyst consensus of £375m – outgoing chief executive Dame Carolyn McCall, 55, said the extra capacity put pressure on yields.

It comes just days after German flag carrier Lufthansa voiced similar concerns over the pricing outlook, despite also upgrading its profit forecast.

Despite the warning, EasyJet enjoyed a strong third quarter performance. Sales in the three months to June 30 increased 16pc to £1.4bn while passenger numbers jumped 10.8pc to 22.3m. Total revenue per seat increased 2.2pc to £55.80 per seat.