EasyJet losses narrow to £169m on rest of travel restrictions as airline pins profit hopes on 2023
- EasyJet achieved record underlying earnings of £674m within the fourth quarter
- Nearly 70m people flew with the air carrier, in comparison with just 20.4m last yr
- Sales were impacted by the Covid-19 Omicron variant and airport disruption
EasyJet’s annual losses have narrowed by 80 per cent after the airline posted record underlying earnings of £674million within the fourth quarter.
The budget airline reported pre-tax losses of £169million within the 12 months ending September, against £858million the previous yr, because it continued to battle higher costs and a weaker-than-expected rebound in passenger numbers.
Nearly 70 million people flew with the air carrier over the period, in comparison with 20.4 million last yr when onerous Covid-19 restrictions severely depressed demand for overseas travel.
Recovery: The budget airline revealed reported pre-tax losses plummeted to £169million within the 12 months ending September, against £858million the previous yr
Total turnover climbed almost fourfold to £5.8billion consequently, with the group’s performance buoyed by considerable growth in its package holidays business and per passenger revenue rising by a 3rd on a relentless currency basis.
Nonetheless, EasyJet did not post a profit because the ramp-up of capability led to surging costs, particularly for fuel, the worth of which has been supercharged by loosening pandemic-related curbs and the war in Ukraine.
As well as, sales were negatively impacted by the Omicron variant encouraging governments to reimpose travel restrictions and the big disruption that hit airports over the Easter period.
Widespread staff shortages left airlines struggling to address the resurgence in passenger volumes earlier this yr, causing mass delays and flight cancellations for thousands and thousands of holidaymakers.
EasyJet said this disruption subsided after it reduced capability and major travel hubs like London Gatwick and Amsterdam Schiphol put every day passenger limits in place, though it cost the corporate £78million in contrast to 2019 levels.
Nonetheless, the FTSE 250 group said it began the present financial yr with ‘considered one of the strongest balance sheets in European aviation,’ having significantly reduced net debts mainly through repayments on two debt facilities.
Optimism: ‘EasyJet does well in tough times. Legacy carriers will struggle on this high-cost environment,’ remarked chief executive Johan Lundgren (pictured)
For the primary half of the period, the firm forecasts a 25 per cent increase in capability volumes followed by a 9 per cent rise in the following six months, with fourth-quarter capability at pre-pandemic volumes.
Johan Lundgren, EasyJet’s chief executive, remarked: ‘EasyJet does well in tough times. Legacy carriers will struggle on this high-cost environment.
‘Consumers will protect their holidays but search for value, and across its primary airport network, easyJet might be the beneficiary as customers vote with their wallets.’
The Luton-based company noted that bookings for the height October half-term and Christmas weeks had rebounded to normal volumes, while booked load aspects for next Easter had exceeded the prior yr’s levels.
To handle the additional demand and avoid the disruption experienced during much of 2022, EasyJet has begun a recruitment campaign urging people over 45 years old who’re either ’empty nesters’ or searching for a latest profession challenge to turn out to be cabin crew members.
Matt Britzman, an equity analyst at Hargreaves Lansdown, said: ‘Demand looks to be resilient, despite obvious cost of living pressures. Jet setters are splashing what money they’ve on travel, chasing down some winter sun or heading up the mountains to don their best ski outfits.
‘How long this willingness to maintain spending lasts is difficult to evaluate, but with easyJet feeling positive about Spring next yr, it looks like holidays may very well be considered one of the last areas to see spending reign in.’
EasyJet shares were 2.6 per cent, or 10.1p, lower at 382.9p when trading closed on Tuesday, meaning their value has fallen by around 1 / 4 prior to now six months.
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