- The airline’s headline loss before tax is approximately £300m to £1.14bn. climbed up to
- Confusing and ever-changing travel rules lead to fall in demand for flights
- EasyJet expects to fly c.65% of 2019 levels at c.65% of capacity in the first quarter
EasyJet has posted huge annual losses after a year filled with travel restrictions and national lockdowns across Europe.
Headline losses before tax at the budget airline climbed from around £300million to £1.14billion in the year, due to a more than half the drop in passenger numbers and revenue.
Not only did the temporary ban on foreign travel across Europe prevent people from taking longer flights, but confusing and ever-changing travel rules also prompted many Britons to avoid booking flights and take domestic holidays instead.
Problem: Headline loss before tax at budget airline jumped from nearly £300 million in the year to September 30, as passenger numbers and revenue fell by more than half
Demand has begun to improve significantly since restrictions were eased during the summer, with the company noting that bookings were strong for the October half-term, ski and Christmas periods.
It expects to fly at about 65 percent of 2019 level capacity in the first quarter, followed by 70 percent in the following three months before reaching its pre-pandemic levels in the last quarter.
This is despite concerns about the proliferation of the Omicron variant, which acknowledged that it had caused a slowdown in business with many customers shifting their bookings to later dates.
Starting today, all international travelers arriving in the UK must undergo a PCR test within two days of arrival and self-isolate until a negative test is received. Ten African countries have also been added to the Travel Red List.
Shares of London-listed airlines fell last Friday after Prime Minister Boris Johnson imposed the latest travel restrictions at a Downing Street press conference, with EasyJet’s share price at a pandemic low.
EasyJet said: ‘It is too early to say what effect Omicron might have on European travel and any further short-term restrictions it could result in. However, we have prepared ourselves for such a period of uncertainty.
The airline has raised nearly £6 billion since the coronavirus crisis began, including £1.2 billion through an investor rights issue in late September, to help reduce its debt and make new investments.
It raised another £500 million last year by leaving one of its bases, cutting full-time crew numbers, renegotiating contracts to reduce redundancy costs, and cutting base pay in some high-cost countries. Saved.
Through flying less frequently, publicly funded support measures such as the UK government’s furlough scheme, and by spending £350 million less on jet fuel, the group reduced overall title costs by £1.25billion.
Chief executive Johan Lundgren said: ‘[EasyJet] Moving through the pandemic with renewed vigor, has transformed the business by optimizing our network and flexibility, transforming ancillary revenue while also delivering significant cost savings.
Rebound: Sophie Lund-Yates of Hargreaves Lansdowne said that since EasyJet is a short-haul service, it should see demand revive more quickly than long-haul air carriers.
“These initiatives, combined with our strong, investment-grade balance sheet, give EasyJet new strength to manage any further COVID-related travel disruptions, while simultaneously fast-tracking our growth and delivering strong shareholder returns. provide a platform for
EasyJet plans to increase its aircraft fleet to 25, add new slots at four airports including London Gatwick and Linate in Milan, and is increasing the volume of aircraft at its seasonal bases.
Sophie Lund-Yates, an equity analyst at Hargreaves Lansdowne, commented that the airline’s most important advantage is that as a short-haul service, it should see demand revive more quickly than with long-haul air carriers.
She said: ‘The group is confident that capacity will be close to pre-pandemic levels by next summer. A big pillar of that success also comes down to EasyJet’s friendly network, which has more popular slots at prized airports.
‘There’s no getting away from the fact that there’s more to climb, and the months ahead will be the best. But a fresh fresh liquidity position and competitive advantage mean there is some reason for optimism where EasyJet is concerned.
EasyJet shares closed down 1.2 per cent at 496.5p on Tuesday, meaning their value has fallen nearly 40 per cent over the past six months.