EasyJet pandemic losses top £2bn

Losses at low cost airline easyJet have topped £1bn for the second year in a row and the carrier said the Omicron COVID variant was impacting bookings. Tony McDonough reports

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Losses have topped £1bn for the second year in a row at easyJet

 

Annual losses at easyJet have passed £1bn for the second year in a row as the pandemic continues to take a heat toll on the low cost airline.

On Tuesday, easyJet said pre-tax losses for the 12 months to September 30 came in at £1.03bn. Last year the carrier, which operates 25 routes out of Liverpool John Lennon Airport, reported a loss of £1.27bn, the first in its history.

In the last few months airlines such as easyJet, and its main European rival Ryanair, have enjoyed a strong recovery from the pandemic and lockdowns and restrictions eased across many countries.

However, the emergence of the Omicron COVID variant in the past few days has led to a weakening in forward bookings. In its annual report easyJet said: “It’s too soon to say what impact Omicron may have on European travel and any further short-term restrictions that may result.

“However, we have prepared ourselves for periods of uncertainty such as this. While we’ve seen an increase in transfers with some softening of trading for Q1 it is really encouraging to see that we are still seeing good levels of new bookings for H2.

“We still expect that Q4 full-year 2022 will see a return to near pre-pandemic levels of capacity as people take their long awaited summer holidays.”

Total revenue for the 12-month period plummeted by 52% to £1.46bn from just over £3bn last year. easyJet is also reporting strong liquidity of £4.4bn. Last week easyJet said it was hiring an extra 1,500 cabin crew for the 2022 summer season. And chief executive Johan Lundgren offered an upbeat assessment of its prospects.

He said: “EasyJet is moving through the pandemic with renewed strength having transformed the business by optimising our network and flexibility, delivering significant cost savings while also step-changing ancillary revenue.

“These initiatives alongside our strong, investment grade, balance sheet provide easyJet with renewed strength to manage any further COVID-related travel disruptions, as well as a platform to fast track our growth and deliver strong shareholder returns. With this platform, we have the ambition to beat our targets set earlier this year.

Sophie Lund-Yates of share broker Hargreaves Lansdown said easyJet’s results were better than expected but she also offered a note of caution. She said: “Airlines can’t seem to catch a break.

“News of new COVID variants, and the potential for further travel restrictions, makes it incredibly difficult to predict trading patterns from here. There is no getting away from the fact EasyJet has further to climb and the coming months will be patchy at best.”

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