EasyJet narrows losses as travel demand picks up

EasyJet  EDITORIAL USE ONLY Passengers board the first holiday and leisure flight at Gatwick Airport, destined for Faro, Portugal as easyJet relaunch flights from the UK to green-lit destinations today, for the first time this year. Picture date: Monday May 17, 2021.
EasyJet share price struggles to gain altitude. Photo:PA

Budget carrier easyJet (EZJ.L) expects to carry nearly as many passengers in the last few months of this year as it did in 2019 as demand for leisure travel jumps following the end of COVID restrictions.

The London-listed airline said that it will put nearly as many seats on sale in the last three months of this financial year as it did in 2019. Capacity on sale will be 97%, it added.

Bookings have risen to 6% above 2019 levels in the past 10 weeks, thanks to a surge in demand for leisure and domestic flying.

It came as easyJet revealed it had narrowed its losses to £557m over the half-year period, down from £645m a year earlier. Revenue rose more than fivefold to £1.5bn.

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Chief executive Johan Lundgren said: “EasyJet has reduced its losses year on year, at the better end of guidance.

“The pent-up demand and removal of travel restrictions provided for a strong and sustained recovery in trading which has been further boosted as a result of our actions.”

However, easyJet share price struggles to gain altitude, according to chief market analyst at CMC Markets, Michael Hewson.

“Despite the loosening of travel restrictions and increase in flying hours over the last few months the easyJet share price has struggled this year, hitting 18 month lows in the aftermath of Russia starting its invasion of Ukraine.

“There is also the risk that the rising cost of living will deter passenger numbers on account of lower disposable revenue, while easyJet costs for H2 are likely to be higher as well.

“Consequently, given the range of financial uncertainties, easyJet haven’t provided any financial guidance for the rest of the year.”

Richard Hunter, head of markets at Interactive Investor, added: “easyJet is emerging quickly from the holding pattern which had decimated earnings through the course of the pandemic.

"Given that this reporting period also includes the disruption resulting from the recent Omicron variant, the outlook comes with the likelihood of more positive news to come. The company’s previous rights issue stabilised the business and easyJet is now looking to recoup lost revenues through a combination of higher passenger numbers and its own measures to improve profitability."

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Since Easter the airline has been flying up to a quarter of a million customers and 1,600 flights every day.

Its easyJet holidays business is now on track to carry over 1.1m passengers in the current fiscal year, with over 70% of the programme sold.

Sophie Lund-Yates, equity analyst at Hargreaves Lansdown, said: “EasyJet’s about-turn is almost complete, with plans to operate within a whisker of pre-pandemic levels by the end of the year. Revenue has increased dramatically as the short-haul specialist has ramped up capacity, and crucially – passengers have come to fill it.

“That means losses have been narrowing despite the enormous cost that comes with switching an entire airline back into the ‘on’ position.”

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