Upper Crust chain owner SSP Group has today forecast annual operating profit slightly below its previous expectations, as subdued summer travel in North America outweighed growth in the UK.
The Middle East conflict and its impact on air travel and airline capacity have weighed on the company, which operates food and beverage outlets at airports and train stations.
While travel demand in the US has remained resilient among wealthier tourists, budget-conscious customers have cut back on vacation plans as airlines hike ticket prices to mitigate the impact of elevated fuel costs.
American Airlines, United Airlines and Southwest Airlines have also scaled back on flights to offset higher fuel prices.
The company said it expects annual operating profit of about £230m, slightly below company-compiled analyst expectations of £239m, as passenger numbers in the world’s largest travel market remained subdued during the peak summer period.
RBC analysts said that higher jet fuel prices may weigh on near-term travel demand in the region.
Resilient demand in the UK and Ireland provided a boost, with fourth-quarter like-for-like sales rising 9%, compared with 2% growth in North America.
“Despite the significant impact of the Middle East conflict on passenger volumes in APAC & EEME, the strength and diversification of our portfolio leaves us well-positioned to deliver group earnings per share for the year in line with current market expectations,” chief executive Patrick Coveney said.
Passenger volumes in the Gulf markets have also rebounded quarter-on-quarter to now trade at 90% of prior-year levels, SSP said.
However, traffic in the surrounding Eastern Mediterranean, Asia Pacific and Indian regions remains tepid.
