• Gatwick drone disruption resulted in 400 cancelled flights and a loss of £15m.
• Company states it remains well placed to deal with Brexit.
• We continue to recommend the shares as medium risk ‘buy’.

Easyjet today reported a 14% rise in first quarter revenue to £1.3bn with passenger numbers up 15% to 21.6m. The recent drone disruption at Gatwick resulted in 400 cancelled flights, with the carrier reportedly paying out £10m in ‘customer welfare costs’ and losing a further £5m in revenue due to the cancelled flights, totalling a loss of around £15m.

In terms of the year ahead it said while demand remained robust it now expected revenue per seat to fall by mid to high single digits in the first half, while for the full year expectations were in line with those of the market. The company believes it is well placed to deal with Brexit and is seeing a good level of forward bookings for the period after 29th March.

While the first quarter performance and future prospects both remain good the outlook given by the company was not as positive as expected. The market has shrugged that off with the shares rising 2% in early trading today; perhaps due to the understanding these are relatively short term issues. With a good balance sheet and a dividend yield over 5% we continue to view the shares as a buy for medium risk investors seeking a balanced portfolio.

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