Watch: EasyJet eyes June recovery for holidays as it books £701m loss
EasyJet (EZJ.L) is pinning its hopes on a rise in demand for “green listed” destinations this summer after reporting a £701m ($990m) loss for the six months ending 31 March, against £193m a year ago.
The budget airline saw passenger numbers nosedive 89.4% to 4.1 million over the period compared with the first half of 2020, while total revenue slumped 90% to £240m.
It expects a slow start to the summer holiday season, forecasting that it will fly just 15% of its capacity in the third quarter of this year compared to 2019.
However, EasyJet is hoping that this will increase from June onwards as the next stage of lockdown restrictions are set to ease. It said it was able to use up to 90% of its fleet to meet any surge in demand.
The Luton-based carrier has already seen strong demand for more than 105,000 new bookings to UK green-listed countries, such as Portugal, after the government announced a number of destinations earlier this month. Holidaymakers are required to COVID test when travelling to such countries but do not have to quarantine on return.
EasyJet added that its cost-cutting programme is expected to deliver £500m in savings over the 12 months to September.
Shares fell 2.6% on the back of the news.
Johan Lundgren, easyJet’s chief executive, said: “With leisure travel taking off in the UK again earlier this week where we are the largest operator to green list countries and with so many European governments easing restrictions to open up travel again, we are ready to significantly ramp up our flying for the summer with a view to maximising the opportunities we see in Europe.
“We have the ability to flex up quickly to operate 90% of our current fleet over the peak summer period to match demand. We know there is pent-up demand. We saw this again when green list countries were released.”
Lundgren also urged the UK government to open travel to more amber list countries so that more services can be restarted.
His comments come just days after health secretary Matt Hancock warned against visiting "amber list" countries.
“People should not travel to amber or red list countries unless it’s absolutely necessary, and certainly not for holiday purposes,” he said.
Hancock said mutant strains of the virus meant people should avoid going to countries such as Spain, Italy, France and Greece.
It also came after warnings from leading medics and scientists last weekend that suggested it might be too soon to move to the next stage of the unlocking roadmap.
EasyJet said it could not give any further guidance for full-year financial expectations, due to uncertainty caused by coronavirus. The airline has close to seven times as much debt as it did prior to the pandemic as the health crisis wreaked havoc on the industry last year.
“Even if the more immediate damage the pandemic has caused may soon be over, there are going to be long-lasting consequences that the airline will have to struggle with for years to come,” Freetrade analyst David Kimberley said.
Meanwhile, Michael Hewson, chief market analyst at CMC, said: “EasyJet has made progress on reducing its costs, which have fallen 59% to £844m, and slowing its cash burn, but even with the improvements here it's now pretty certain that the airline is heading for its second successive annual loss.”
He added: “At the beginning of the year there was a great deal of optimism, that with the vaccine program well advanced there might be a semblance of a return to normal as the summer approached. This optimism now looks rather misplaced.”
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