EasyJet hurtles towards first full-year loss in its history as Covid bites

EasyJet, the budget airline with a string of routes out of Scotland, is hurtling towards the first full-year loss in its history.

Thursday, 8th October 2020, 8:54 am
EasyJet, the budget airline with a string of routes out of Scotland, is heading towards the first full-year loss in its history. Picture: Ian Georgeson
EasyJet, the budget airline with a string of routes out of Scotland, is heading towards the first full-year loss in its history. Picture: Ian Georgeson

The low-cost carrier warned it is set to slump into the red by up to £845 million as it continues to be buffeted by the pandemic.

The group, which is reportedly in talks to secure a state loan or some other form of financial aid, said it is braced for underlying pre-tax losses of between £815m and £845m for the year to 30 September after seeing passenger numbers halve as the coronavirus crisis crippled the industry.

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In a trading update, the Luton-headquartered carrier said losses reached between £295m and £325m in its fourth quarter, which were lower than those in the previous three months when planes were grounded during the lockdown.

It said it continues to keep its finances under review and “assess further funding opportunities” amid reports that it has warned the UK government it may need further financial support if the pandemic continues to batter demand.

Chief executive Johan Lundgren said: “This year will be the first time in its history that EasyJet has ever made a full-year loss.

“Aviation continues to face the most severe threat in its history and the UK government urgently needs to step up with a bespoke package of measures to ensure airlines are able to support economic recovery when it comes.”

The airline revealed it flew just 38 per cent of its planned capacity between July and September – normally the peak summer holiday season.

Flying peaked in August and then fell significantly in September when customer demand was hit by changes in government travel guidance and quarantine rules. Over the full year, passenger numbers slumped by 50 per cent to 48 million.

The airline recently agreed a deal with unions to avoid compulsory redundancies as it looks to slash its cabin crew and pilot workforce by up to 30 per cent.

Richard Hunter, head of markets at Interactive Investor, noted: “The airlines remain in fight rather than flight mode, conserving capital in any way possible, as evidenced by some of the measures announced by EasyJet following the halving of passenger numbers due to the pandemic.”

Meanwhile, EasyJet also announced that it would open two new seasonal bases in Faro, Portugal and Malaga, Spain in time for next summer.

The move will create some 200 pilot and crew jobs and will see the carrier base three aircraft in each airport.

Thomas Haagensen, group markets director, said: “We are very pleased to announce the opening of a third base in both Portugal and Spain next summer.

“Despite the difficult environment that the whole industry is navigating through, this move confirms our commitment to these two popular destinations and will enable us to better serve our customers by optimising our schedule over the summer season as well as making a positive economic contribution to each region.”

The addition of Malaga and Faro means that the airline operates from 28 bases across its network.

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