EasyJet plunged 213 million into the red in the Christmas quarter and is still burning through 150 million in cash each month, putting its losses in Covid 19 at 2.2 billion.
The short-haul European airline, the second largest behind Ryanair with more than 300 aircraft in its fleet, said yesterday it was still operating at only 50 per cent of normal capacity but that an increase through Easter and the spring should bring it back to pre-pandemic levels for the key summer holiday season.
With deep losses expected in the January-to-March quarter, traditionally its toughest, City analysts are not expecting a summer recovery to return the airline to profit this year.
EasyJet's losses in the three months to the end of December, the first quarter of the financial year, were half of the deficit it had recorded in the same period a year ago, but the losses were still deep compared to normal times, even after flying much-reduced schedules to fit demand. Before the pandemic, the Christmas trading quarter may have been expected to operate at break-even.
The airline's shares suffered during the epidemic. Shares in Ryanair and Wizz Air, the ambitious budget carrier snapping at its tailfins, have been brought back to pre-pandemic levels, but easyJet s stock was more than halved and pretty much stayed there. The airline undertook 1.2 billion fundraising with its shareholders last autumn to shore up its balance sheet and investors were worried about whether it would be able to stay the course.
EasyJet's shares went up by p, or less than 0.1 per cent, to 635 p yesterday. That is up from the 500 p level they hit as the Omicron coronaviruses spread over Europe before Christmas, but it is less than the 10 level at which they were trading during a rally last spring. An end to travel restrictions around Europe, hopes that Omicron infections would recede and a belief in strong pent-up demand from holidaymakers led Johan Lundgren, 55, to strike a bullish note. Booking volumes jumped in the UK after the welcome reduction of travel restrictions on January 5, which have been sustained and given further boosts from the UK government s decision to remove all testing requirements, he said.
We believe that testing for travel across our network should become a thing of the past. We see a strong summer ahead, with pent-up demand that will see easyJet return to near-2019 levels of capacity, with UK beaches and leisure routes performing particularly well. EasyJet is the dominant airline at Gatwick, Britain's second largest airport, where British Airways, its main rival there, is cutting its operations, and will account for half of all flights.
The airline's immediate outlook remains cautious and it is selling tickets for only 67 per cent of its normal capacity this quarter. That is not much higher than in the previous quarter, which came in at 64 per cent.
It conceded that it had not achieved its guidance of expecting to fly its aircraft at 80 per cent full. Gerald Khoo, an analyst at Liberum thinks that EasyJet will eventually be a winner in the aviation recovery, but he believes that it will lose 25 million dollars for this financial year before it returns to normal profit levels of 490 million in 2022 -- 23.