EasyJet losses for 2021 will near £1.2bn but skies are clearing for struggling airline as passenger numbers rise to 70% of pre-Covid levels
- Losses expected to be between £1.14bn and £1.18bn in the year to 30 September
- Passenger numbers have been at 53% of 2019 levels in the last three months
- Intra-European demand led the recovery in passenger numbers
EasyJet losses are set to be lower than expected this year with the struggling airline reporting improving passenger figures for the year as lockdown restrictions eased.
Pre-tax losses will now come in between £1.14billion and £1.18billion for 2021. Passenger numbers meanwhile are expected to be at 70 per cent of 2019 levels in the winter months ahead, a stark rise on 53 per cent in the past three months and 17 per cent in the quarter to the end of June.
Intra-European demand led the recovery in passenger numbers, with more recent easing of travel restrictions expected to drive figures higher in the 12 months ahead.
However, UK international travel remained low at just 32 per cent of 2019 levels.
EasyJet has generated £40million of operating cash during the last quarter and reduced net debt from £2billion to £9million, following a £1.2billion rights issue.
It follows a cost cutting exercise, which the airline says saved it £510million in the 12 months to the end of September, ‘of which almost half will be sustainable’.
‘The sustainable benefits will help partially mitigate inflationary pressures and cost headwinds in ownership costs and navigation charges,’ it added.
CEO of EasyJet Johan Lundgren said: ‘We are encouraged to see positive booking momentum into FY22 which has led us to increase our capacity plans for Q1 to fly up to 70 per cent of 2019 levels.
“It is clear recovery is underway. 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 from customers looking for flights and holidays to popular winter sun destinations including Egypt and Turkey.
“Having successfully completed our rights issue and strengthened the balance sheet, we will take advantage of strategic investment and growth opportunities to deliver strong shareholder value.’
EasyJet shares were down 3.3 per cent 626.4p this morning, bringing the airline to a year-to-date share price loss of 1.9 per cent.
But equity analyst at Hargreaves Lansdown Nicholas Hyett explained the outlook for Easyjet now appears more positive.
He said: ‘Put improved demand together with a rights issue reinforced balance sheet, and easyJet will be feeling more optimistic about the new financial year than at any time since the pandemic began.
‘All being well the worst is behind it, and while there may be turbulence ahead, the days when airline investors would have been well advised to keep an emergency parachute close at hand seem to be over.’