Yesterday, the prospect of jam tomorrow was more appealing than something less appetising. EasyJet announced record losses for winters outside of travel restrictions.
EasyJet announced that it will report losses of up to £425million for the six-month period ending March.
The City deemed the loss of the first half less important than the prognosis of a good spring and summer, which fueled the recovery in an share price that had fallen during the pandemic.
Gatwick Airport, Britain’s second largest airport, has suffered a loss of PS193 millions in the latest winter, which is more than double the PS193million it lost during the winter of 2019-20. The latter half of that period was affected by the cancellation of flights due to Covid-19. It had suffered its worst ever first half in the previous winter, with losses of £275 million.
EasyJet’s performance over the winter of last year shows just how far behind its main rival, Ryanair, it is. Ryanair expects to make a profit of around £1.25 billion for its entire financial year ending in March. This means that it is largely even with the winter.
EasyJet now expects to surpass the £260m predicted by analysts for its entire financial year ending in September. This would mean profits of over £685 millions this spring and summer. That would bring the airline back to its £705million profit in the same period last year.
EasyJet reported that it operated at a level close to the pre-pandemic period during Easter, a key holiday season. EasyJet said it would have exceeded 2019 levels in summer this year if not for the downsizing at Berlin airport, where it had reduced capacity by over two-thirds and operated only 11 aircraft. The carrier is expected to be operating at pre-Covid levels in the summer of 2019. This will allow it to catch up and surpass the 96,000,000 passengers it carried before the coronavirus appeared.
The airline claimed that its performance had improved due to “network optimization [and] enhanced ancillary product”, which meant it flew more frequently to popular destinations, dropped less profitable services and charged more for priority boarding, seating and baggage.
The historically high costs of jet fuel and the impact of inflation in the labour market, supply chain, and “building resilience” into the operation before summer 2023 — ensuring it has enough employees at the right places — are all factors to consider. In recent months, it has hired 3,000 more employees.
Johan Lundgren , easyJet CEO said: “Demand has increased for easyJet flights and holidays, which is further enhanced by the transformed network of popular destination and our improved revenue capabilities.” We see strong bookings into the summer, as customers prioritize travel spending.
In the first half of 2018, group revenues reached £2,69 million. This is 80 percent higher than last year. The deficit between incomes and expenses has increased compared to the winter of 2019.20. In three years, revenue per seat stood at £55.60 but operating costs per seat were £59.75. Over the last six months, revenues per seat have increased to £66.46. However, operating costs are now £77.59.
EasyJet shares rose 8 1/4p or 1.6% to 519 1/4p. They began 2023 at 325p.