Easyjet says it expects to record annual pre-tax losses of between £815 and £845 million, and is forecasting to operate just 25 per cent of capacity in the first quarter of 2021.
The figures represent the first annual loss in the carrier’s 25-year history, and follow the three-month grounding of all aircraft earlier this year as a result of the Covid-19 pandemic.
Easyjet said that passenger numbers for the full year to September 30, 2020 fell by 50 per cent to 48 million. Capacity fell to just 39 per cent in September (down from 52 per cent in August) as “constantly evolving travel restrictions across Europe” impacted on customer demand.
The airline expects to fly just 25 per cent of planned capacity in the first quarter of FY 2021, although it said that it will cover “the majority of our pre-existing network with reduced frequency, taking advantage of the European slot waiver mechanism put in place for this winter to best match our capacity against the lower demand that currently exists”.
The carrier also said that customer demand had “shifted rapidly over the summer”, largely influenced by countries and regions that remained quarantine free.
Striking a positive note Easyjet said that “Early booking levels for summer 2021 are in line with previous years”, adding that it would “act quickly to selectively acquire attractive slots made available in locations where the opportunity arises”.
The carrier has embarked on a restructuring process in recent months, launching consultations to reduce staff numbers by up to 30 per cent, and closing bases at Southend, Stansted and Newcastle airports.
Commenting on the news CEO Johan Lundgren said:
“At the beginning of this year, no one could have imagined the impact the pandemic has had on the industry. Easyjet has adapted and risen to the challenges presented by the pandemic by taking decisive actions to minimise losses, bolster liquidity and reduce cash burn while launching a major restructuring programme, having completed the UK consultation and commenced consultations in a number of key countries.
“Throughout we have taken a very prudent and conservative approach to capacity and this disciplined approach has seen us deliver a better than expected cash burn outcome in Q4 and will see us continue to focus on profitable flying over the winter season in order to minimise losses and cash burn during the first half of 2021.
“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.
“Easyjet came into this crisis in a very strong position thanks to its strong balance sheet and consistent profitability. This year will be the first time in its history that EasyJet has ever made a full year loss.”
