Last year easyJet reported full-year losses of £1.2bn, the first deficit in its history, and it is on course to see losses exceed £1bn again this year – but it’s recovery is gathering pace. Tony McDonough reports
Pre-tax losses at easyJet are expected to exceed £1bn for the second year in a row although it has seen a 400% surge in bookings on winter sun routes.
Like the rest of the aviation sector sector, easyJet continues to chart a recovery out of the COVID-19 pandemic. Last year losses hit £1.2bn, the first deficit in its history, as passenger numbers were slashed by 50% amid multiple lockdowns.
In a trading statement on Tuesday morning the carrier, one of the two biggest at Liverpool John Lennon Airport along with Ryanair, said it expected pre-tax losses for the year to September 30, 2021, to be between £1.135bn and £1.175bn. Analysts had forecast a loss at the upper end of that range.
In the final three months of this year easyJet is adding 100,000 seats and it expects capacity to be up to 70% of the same period in 2019, just prior to the pandemic. As the Government has lifted travel restrictions it has seen a surge in bookings to destinations such as Egypt, Turkey and the Canary Islands.
In the three months to the end of September, the airline flew 17.3m seats, operating 58% of full-year 2019 capacity. It saw a stronger performance on intra-European and UK domestic routes. Demand for international routes from the UK continued to be impacted by UK Government travel restrictions.
During the quarter it generated £40m of operating cash. Net debt has reduced to £900m from £2bn in the previous quarter, following the successful £1.2bn rights issue. The company said the capital raise provides the airline with a “solid platform” for growth.
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 full-year 2022 which has led us to increase our capacity plans for Q1 to fly up to 70% of 2019 levels. It is clear recovery is under way.
“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.”