Budget airline in pent-up demand boost amid ‘sustained recovery’
EASYJET has narrowed its losses and is aiming to carry nearly as many customers by the end of the year as it did before the pandemic.
The budget carrier said over the past ten weeks customers of the airline have booked six per cent more tickets than they did in the same period two years ago.
It said that pre-tax loss was £557 million over the six months to the end of March, down from £645m a year earlier.
Total revenue increased by 524% to £1.5 billion, against £240m, mostly due to the increase in capacity and ancillary products continuing to deliver incremental revenue.
“Easyjet has reduced its losses year on year, at the better end of guidance,” said chief executive Johan Lundgren. “The pent-up demand and removal of travel restrictions provided for a strong and sustained recovery in trading which has been further boosted as a result of our actions.
“We have transformed the airline during the pandemic which has enabled us to emerge with renewed strength, underpinned by a product, network and service that customers really value.”
This has included moving planes to different routes in better performing markets.
“Since Easter we have been flying up to a quarter of a million customers and 1,600 flights every day and in the second half leisure and domestic capacity will be above 2019 levels,” the chief executive said. “It has been well documented that the industry is experiencing some operational issues so, as you would expect, we have been absolutely focused on taking action to ensure we have strengthened our operational resilience for this summer so we can deliver a great, reliable operation to our customers.”
The business, which in 2020 added a ninth aircraft to its Edinburgh base after it confirmed a fifth additional aircraft in Glasgow, has managed to weather the massive spikes in price for jet fuel in recent months. The firm said it had bought enough fuel ahead of time to withstand the big hikes.
Mr Lundgren also said: “We are in a good place as you can see versus competitors ... but you are absolutely right that this will be coming towards us like all other companies in terms of the costs.”
He said that if prices do need to go up, easyjet could still benefit with the backdrop of customers squeezed by higher costs of living.
“Easyjet has always performed well relative to others in the time of recession because people will be much more concerned about value for money,” he said.
The firm said leisure and domestic routes are expected to fully recover with capacity at 113% and 104% of fullyear 2019 levels respectively, whilst business and city traffic continues to recover but demand is currently below 2019 levels.
Sophie Lund-yates, of Hargreaves Lansdown, said: “Easyjet’s about-turn is almost complete, with plans to operate within a whisker of pre-pandemic levels by the end of the year. Revenue has increased dramatically as the short-haul specialist has ramped up capacity, and, crucially, passengers have come to fill it. That means losses have been narrowing despite the enormous cost that comes with switching an entire airline back into the ‘on’ position.
“The group’s also confident that the cost of living crisis isn’t touching performance. It was quick to point out that holidays are more important to people these days, after two years without travel abroad.
“This idea does ring true to some extent, but there’s no getting away from the fact that if faced with a recession, a holiday, whether a hop down the road or a city break to Prague, simply isn’t going to happen for millions of people. This isn’t a flashing red indicator at this juncture, but it’s something to keep one eye on.” Shares in easyjet closed up 0.12%, or 0.6p, at 501.6p.