Easy­jet ex­pands sum­mer sched­ule on higher de­mand

The Star Malaysia - StarBiz - - Foreign News -

LONDON: Easy­jet Plc is see­ing a stronger than an­tic­i­pated re­bound in pas­sen­ger de­mand fol­low­ing the lift­ing of lock­downs, prompt­ing it to ac­cel­er­ate the ad­di­tion of flights.

Air­craft op­er­ated with 84% of seats full in July, Easy­jet said in a state­ment yes­ter­day. With book­ings for late sum­mer ahead of pro­jec­tions it will op­er­ate 40% of ca­pac­ity in the quar­ter through Septem­ber, up from the planned 30%.

“I am re­ally en­cour­aged that we have seen higher than ex­pected lev­els of de­mand,” chief ex­ec­u­tive of­fi­cer Jo­han Lund­gren said in the re­lease.

“We have now com­pleted more than one month of restart op­er­a­tions and are see­ing en­cour­ag­ing per­for­mance across the net­work.”

With Covid-19 in­fec­tion lev­els de­clin­ing in most of Europe, gov­ern­ments have been eas­ing travel re­stric­tions.

Bri­tain’s big­gest low-cost car­rier was among the first Euro­pean air­lines to be­gin build­ing up ser­vices as lock­downs eased, though the rein­tro­duc­tion of UK curbs on peo­ple ar­riv­ing from Spain has cre­ated some un­cer­tainty, ac­cord­ing to Lund­gren.

San­ford C. Bern­stein an­a­lyst Daniel Roeska said in a note that Easy­jet’s seat-oc­cu­pancy level and a lower-than-ex­pected cash out­flow were both “mod­estly en­cour­ag­ing”.

Shares of the Lu­ton, Eng­land-based car­rier traded 5.3% higher at 534.2 pence as of 8:07 am in London, par­ing the de­cline this year to 62%.

A com­par­i­son of July traf­fic shows that

Easy­jet has been less ag­gres­sive than ri­val dis­coun­ters in bringing back flights, re­sult­ing in higher oc­cu­pancy lev­els.

The UK air­line at­tracted 2 mil­lion pas­sen­ger last month, whereas Ire­land’s Ryanair

Hold­ings Plc, Europe’s largest no-frills car­rier, lured 4.4 mil­lion cus­tomers but with 72% of ca­pac­ity filled.

Smaller Wizz Air Hold­ings Plc, the low-cost leader in Eastern Europe, has been faster in build­ing up its sched­ule and car­ried 1.8 mil­lion pas­sen­gers with a lower load fac­tor of 60.5%.

Roeska said Easy­jet’s stead­ier ap­proach may re­flect ei­ther lower de­mand on the routes it serves, which have a higher mix of busi­ness pas­sen­gers, or more cau­tion on the part of man­age­ment.

Easy­jet posted just £7mil (Us$9.2mil) in rev­enue for the fis­cal third quar­ter end­ing June 30, down from £1.76bil a year ear­lier, af­ter re­sum­ing flights mid-month fol­low­ing a near ground­ing of its fleet at the height of coro­n­avirus lock­downs.

It posted a loss of £324mil ver­sus a profit of £174mil, though it said the loss for the cur­rent quar­ter should be smaller.

Easy­jet, which raised £419mil in a share sale in June, said it’s plan­ning to sell more planes to raise about £245mil, be­fore leas­ing them back.

Lund­gren said on a me­dia call that Bri­tain’s 14-day quar­an­tine for ar­rivals from Spain will most likely push peo­ple to visit al­ter­na­tive sunspots, adding that there’s lit­tle vis­i­bil­ity into de­mand be­yond Septem­ber. — Bloomberg

Re­bound: Lund­gren says he is en­cour­aged by the higher than ex­pected lev­els of de­mand for his air­line. — Reuters

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