EasyJet ‘confident’ about travel recovery despite £318m quarterly loss

EasyJet incurred a loss of £318 million in the three months to June as it projected running 60% of pre-pandemic capacity in the summer peak.

The UK budget carrier operated just 17% of equivalent 2019 capacity in the past quarter as part of a “disciplined approach to capacity and cash management”.

Total cash burn during the quarter reduced to £55 million as a result, as the airline flew three million passengers on capacity of 4.5 million seats and achieved revenue of £213 million.

The trading update came as a poll for the airline revealed that 83% of people believe that the fully vaccinated should be free to travel to green and amber list holiday destinations.

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The research found that:

  • Nearly nine-in-ten (88%) Britons believe government travel policy advice over the past 18 months has been confusing
  • UK holidaymakers could be priced out of their first holiday abroad for first time in two years if test costs and rules remain

EasyJet is calling for the government to bring an end to “unnecessary and expensive” testing for flying abroad, in line with much of Europe.

Almost two-thirds (61%) said they are much more likely to want to travel abroad once they have been double jabbed, with the research showing that travel was a major reason in driving the decision to get vaccinated.

As many as 47% said that one of the main reason they got or would get the Covid-19 vaccine was to travel abroad.

The airline was able to maintain net debt broadly flat at £2 billion and a headline pre-tax loss of £318 million in the past quarter, described as being in line with expectations.

EasyJet switched capacity away from the UK to the continent “to serve some of the stronger traffic flows we are seeing within Europe”.

Booking rates on flights from the UK were lower than intra-EU flying due to the uncertainty around government restrictions.

The airline added: “In order to capitalise on the opening-up of travel in continental Europe and the easing of restrictions for the fully vaccinated in the UK, easyJet continues to pivot capacity towards popular routes where we see rising customer demand.

However, easyJet expects the situation to improve quickly as curbs are lifted.

“We remain confident about demand for travel this summer and into autumn, due to the bookings surges experienced following selective easing of travel restrictions, such as the 400% increase in week-on-week flight bookings seen following the waiving of quarantine for fully vaccinated passengers returning from amber list destinations.

“EasyJet will emerge from the pandemic transformed, driven by a cost programme that is delivering, industry-leading network/schedule flexibility, a step change in ancillary revenue and with easyJet holidays taking market share.”

Chief executive Johan Lundgren said: “During this quarter we have successfully managed through the continued challenges of the pandemic, using our operational responsiveness to capture demand while focusing on cost control and minimising cash burn.

“We have used our existing strengths like our network with renewed purpose – pivoting capacity to Europe where we saw the strongest demand and the very way we have approached the challenges that we faced means we have adapted and built back stronger for the future.

“As a result, we will emerge from the pandemic with longer-term wins along-side baked in sustainable cost reductions, responding effectively and in ways our competitors don’t or can’t.

“This is all underlined by our proven business model, low fares, unrivalled network and brand trust which will be crucial going forward.

“So, while we know the road to recovery from the pandemic isn’t going to be a straight line we are ready to compete using these new-found strengths with everything we have learned leaving a long-term, positive imprint on the airline, transformed ready for the post-pandemic era.”

More: EasyJet starts Gatwick-Belfast City service

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