Airlines pin hopes on winter getaway
BA and Easyjet defy gloom
AirLinES shrugged off economic doom and gloom to declare they expect a bumper winter flight schedule.
British Airways owner iAg said sales this summer were ‘better than expected’ and there was ‘no indication of weakness’ for the coming months. The group, which also owns Spain’s iberia and ireland’s Aer Lingus, said its passengers’ spending has stayed strong.
That came despite many forecasting a drop-off in demand for holidays as households grapple with spiralling inflation.
Meanwhile, the uK’s biggest budget airline Easyjet said it will carry 20m passengers in the three months to January – a 30pc jump from last year.
Easyjet is still laying on fewer flights over the festive period than before Covid struck, with plans to run at just 83pc of its pre-pandemic levels.
But the carrier said its bookings are higher at this point in the year than they were in 2019. Easyjet’s peak periods – the October half term, Christmas and new Year – are all running at the same level of capacity as 2019.
The updates raised the prospect of a return towards normality for an industry blighted by two years of restrictions and months of staffing shortages.
it also offered much-needed respite for iAg and Easyjet shareholders who have suffered heavy losses this year.
Easyjet shares jumped 2.7pc, or 7.6p, to 292.7p and iAg shares rose 8pc, or 8.04p, to 108.8p. Easyjet boss Johan Lundgren hailed a ‘record bounce-back’ over this summer and said there is ‘continued demand’ for summer next year. He said: ‘Our “summer 23” season went on sale last week and we were filling the equivalent of more than four A320 aircraft a minute in the opening hours.’
Lundgren said Easyjet swung back to profit in the three months to September – typically the busiest time of year for airlines – with earnings as high as £545m. The airline flew 26.3m passengers in those three months, 88pc of the same period before the pandemic. But the performance was not enough to stop Easyjet crashing to its third year of heavy losses since the outbreak of Covid. The shorthaul carrier was battered by mass cancellations, delays and staff shortages, all of which followed the end of two years of travel restrictions.
That saw Easyjet crash to a loss of up to £190m for the year to September 30, taking its overall losses since the pandemic struck to £2.5bn.
The group faced an additional £75m of ‘disruption costs’ in the year as airlines and airports struggled to cope with a surge in demand this summer, when restrictions were finally scrapped. it took a £64m hit because of the surging value of the uS dollar, in which it pays many of its costs, while its revenue is mostly in pounds.
And Easyjet said disruption caused by the Omicron Covid variant and the war in ukraine all fed into the losses.
Victoria Scholar, interactive investor’s investment head, said Easyjet was boosted by pent up demand for summer sunshine. But the airline could be hit by a cutback in consumer spending as the cost of living climbs.