EasyJet says Brexit uncertainty hurting its business

EasyJet has posted a big loss and dialed back its expectations for the European summer season, warning that continued uncertainty over Brexit is driving ticket prices lower.

The discount carrier said that while its preparations for the UK-EU divorce were on track, economic uncertainty and confusion over Brexit were reducing demand for flights in the ultra-competitive market. It warned that the weakness would continue in the second half of its financial year to September 30.

“We are seeing softness in both the United Kingdom and Europe, which we believe comes from macroeconomic uncertainty and many unanswered questions surrounding Brexit which are together driving weaker customer demand,” CEO Johan Lundgren said in a statement.

Shares in the company dropped over 8% in London.

EasyJet said that it would post a loss of roughly £275 million ($359 million) for the six months ending March 31. Final results for the period will be released on May 17.

Airlines across Europe have been put under pressure by weaker fares, a shortage of pilots, rising fuel costs and continued uncertainty over Britain’s departure from the European Union. Last week, Icelandic carrier Wow Air halted operations after failing to secure new investment.

Brexit pain

EasyJet has established a subsidiary in the European Union to prevent its operations from being disrupted by Brexit. It said Monday that it will be “flying as usual” even in the event of a disorderly exit.

Yet nearly three years after the vote to leave the European Union, businesses still don’t know whether Britain will exit the bloc with a deal that protects trade and travel.

UK lawmakers will vote Monday on alternatives to Prime Minister Theresa May’s divorce deal, which they have rejected three times. The exit deadline — delayed once already — is less than two weeks away on April 12.

The UK government has warned that a disorderly break with the European Union would cause the economy to slump into recession. The Bank of England says fallout on the United Kingdom from the most disorderly scenario would be worse than the global financial crisis.