EasyJet expects its losses to be lower than the record-breaking deficit of last year, despite the £40 million hit caused by the suspension of flights to the Middle East.
Budget airline shares rose to a near 18-month high on the back of the budget airline’s expectations that the six months leading up to the end March will be less bad than last year’s loss of £425million, and its optimistic outlook for summer bookings.
EasyJet, the largest airline at London Gatwick Airport, is among those who has taken the longest to recover. EasyJet continued to lose money, despite the fact that fares, additional charges, passenger numbers, and flight volume soared in the quarter ending December. This boosted revenue by 22 percent, to £1.8 billion. EasyJet is still losing £126 million compared to the £133 million loss it had at Christmas last year.
In the first quarter of its new fiscal year, the airline carried 19,8 million passengers and flew 22,9 million seats. Although this is a 14 percent increase in each of the metrics compared to Christmas 2022 it is still a significant drop from pre-Covid levels for 2019 when the airline handled 22.2 millions passengers and flew 24.3million seats.
Easyjet cited reduced operations in Germany as a result of a disastrous acquisition of assets from Air Berlin, which had collapsed under former management. Easyjet claims that it has expanded in all large jurisdictions.
Jet fuel prices, which were up 15% year-over-year on an like-for-like comparison basis, did not help operations.
Johan Lundgren is the chief executive of easyJet. He said that losses for the first half of this year will not be as large as they were last year, despite the £40 million loss due to the cancellation of flights from Israel and Jordan to Egypt during the Gaza Conflict and the consequent fall in demand. He added that this would be offset this year by the Easter getaway in March.
Lundgren stated that “we see positive booking momentum in summer 2024, with travel being a priority to consumers.” Bookings for flights and holidays soared during the traditionally busy sales period at the turn of the year, as consumers chose to book their summer holidays in popular destinations like Spain and Portugal along with more exotic ones like Greece and Turkey.
EasyJet filled two aircraft per minute at the peak of its recent sale. That’s about six seats a second. The most popular routes were to Amsterdam, Paris, and sunny Alicante, Malaga, and niche routes like Skiathos in Greece, Rovaniemi, Lapland, Zadar, Croatia, and Tivat, Montenegro. Britons have been flocking to Rennes and La Rochelle, and the airline is increasing capacity by 20 percent to the Alps now that the ski season has returned to normal.
EasyJet shares rose by nearly 4 percent or 19 1/4p, to 527 1/2p. This is only a little below the levels seen last in summer 2022. The stock had fallen precipitously after the airline’s catastrophic return to operation following the end pandemic travel restrictions, when staff shortages caused a long series of delays and cancellations. Easyjet shares traded at over £12 before the arrival of Covid-19.