EasyJet reports ‘recovery underway’ as demand returns

EasyJet expects a group pre-tax loss of between £1.135 billion and £1.175 billion for the year to September while reporting “clear recovery” with positive autumn bookings.

The projection came as the UK budget carrier disclosed that it flew 58% of equivalent pre-pandemic capacity or 17.3 million seats, flying 13.3 million passengers, during the peak summer quarter, generating £40 million of operating cash.

This led to a halving of losses in the quarter compared with the same period last year.

In a trading update, the airline reported a stronger performance on intra-European and UK domestic routes, while demand for international routes from the UK continued to be affected by UK government travel restrictions.

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International travel from the UK was significantly impacted by “onerous and expensive” travel restrictions, resulting in load factors of 63.2%.

EasyJet, which raised £1.2 billion in a rights issue last month, expects capacity to be up to 70% of 2019 levels in the October to December first quarter of its new financial year with a doubling in bookings over the same time last year.

EasyJet has unrestricted access to about £4.4 billion of liquidity. The airline is due to repay £300 million outstanding government loan under the Covid Corporate Financing Facility (CCFF) in November.

The carrier added: “While intra-European demand led the recovery over the summer, the recent UK government announcement to remove and relax restrictions and testing has created positive booking momentum into Q1.

“In response, the airline has added 100,000 seats for Q1, with particularly strong demand for winter sun destinations.

“EasyJet expects capacity to continue to grow throughout full year 2022 and we will take quick and decisive action to capture additional opportunities alongside planned organic growth.”

However, easyJet said: “Visibility remains limited as customers continue to book closer to their travel date.

“At this stage, given this continued level of short-term uncertainty, it would not be appropriate to provide any financial guidance for the 2022 financial year.”

Yield continues to remain under pressure given the current competitive landscape, the airline added.

Chief executive Johan Lundgren said: “During the quarter easyJet significantly ramped up its flying which meant we were the second largest airline operating in Europe this summer while also halving our Q4 losses versus last year.

“We are encouraged to see positive booking momentum into FY22 which has led us to increase our capacity plans for Q1 to fly up to 70% of 2019 levels.

“It is clear recovery is underway. Business travel is returning to easyJet with corporates and SMEs attracted by our value, network and approach to sustainability.

“We have seen city breaks beginning to return alongside growing demand for leisure travel from customers looking for flights and holidays to popular winter sun destinations including Egypt and Turkey.

“October half-term bookings have been strong, particularly to the Canary Islands where we have increased our capacity to c.140% of FY19 levels.

“Having successfully completed our rights issue and strengthened the balance sheet, we will take advantage of strategic investment and growth opportunities to deliver strong shareholder value.”

Full results for the year to September 30 will be reported on November 30.

More: EasyJet holidays welcomes first customers to Egypt

EasyJet extends Northern Ireland routes into winter

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