EasyJet H1 loss of up to £730 million “better than expectations”

posted on 20th May 2021 by Edward Robertson
EasyJet H1 loss of up to £730 million “better than expectations”

EasyJet boss Johan Lundgren has referred to the airline’s first half year headline loss before tax of up to £730 million as “better than expectations”.

The CEO made the comments about the results for the half year ending March 31, 2021, which showed the airline flew at 14 per cent of H1 2019 capacity while passenger numbers were down 89 per cent to 4.1 million after capacity was cut to 6.4 million seats.

This led to total group revenue of about £235 million, down 90 per cent, with passenger revenues down by about 91 per cent to £165 million while ancillary revenue dropped by 87 per cent to £70 million. As a result, the half year loss before tax is expected to be in the range of £690 million to £730 million.

Despite the falling revenues and profits, Lundgren remained upbeat, saying the effects of the cost-out programme introduced to help easyJet cope with the pandemic will support improved margins and reduced seasonality for the future.

He added the airline’s capacity forecast has been accurate throughout the pandemic, further allowing for strong cash control while cash burn has been minimised during the winter season by focusing the airline’s routes on those that generate the most cash.

The airline is also sitting on £2.9 billion, he added, having raised more than £5.5 billion since the start of the pandemic and is well placed to resume operations once governments allow.

Lundgren said: “EasyJet has maintained a disciplined approach to flying during the first half of our financial year, resulting in a first half loss and cash burn better than expectations.

“We continue to have access to significant levels of liquidity alongside easyJet’s major cost-out programme which continues to deliver ongoing cost and efficiency benefits. All of this positions us well to lead the recovery.

“We welcome the confirmation by the UK government that international travel is on track to reopen as planned in mid-May.

“EasyJet was founded to make travel accessible for all and so we continue to engage with government to ensure that the cost of the required testing is driven down so that it doesn’t risk turning back the clock and make travel too costly for some.

“We continue to closely monitor the situation across Europe and with vaccination programmes accelerating, most countries are planning to resume flying at scale in May.

“We have the operational flexibility to rapidly increase flying and add destinations to match demand. EasyJet is ready to resume flying, prepared for the ramp up and looking forward to being able to reunite people with their families or take them on leisure and business flights once again.

“As a result, we remain well-positioned for the recovery this summer and beyond.”

Despite the ongoing uncertainty in Europe as to who can fly where this summer, Lundgren added he expects the airline to fly at up to 2019 capacity levels in Q3 with capacity starting to grow from May onwards.

While he said the airline is also well placed to ramp capacity up or down according to the changing situation with customers having much shorter lead-in times on booking, he added it would be inappropriate to offer any financial guidance for the rest of the year.