LONDON – British airline easyJet warned that it would fly no more than 10% of 2019’s capacity in the Jan-March quarter, down from 18% in the Sept-Dec. quarter, as new lockdowns and tightening travel restrictions across Europe prolong the COVID-19 crisis.
Given the limited visibility over the rest of the summer holiday season, easyJet said it could not provide financial guidance, after reporting an 88% slump in quarterly revenues as passenger numbers collapsed 87% in the three months ended Dec.
The crisis in easyJet’s home market of the UK, its biggest, deepened on Wednesday when the government brought in new measures to crack down on travel, including requiring passengers to justify why they are leaving the country.
Pre-departure COVID-19 testing and quarantine are already in place in addition to a lockdown which bans holidays.
To survive with minimal revenues, which came in at 165 million pounds ($225.3 million) for the last quarter, easyJet has been cutting costs.
It said the majority of its UK-based pilots now have seasonal contracts, it signed new ground handling contracts at its major airports and has brought some maintenance in house.
As a result of these moves, cash burn is estimated to fall to 40 million pounds per week in a fully grounded scenario.
The airline’s finances were significantly strengthened earlier in January, through a new five-year loan facility of $1.87 billion, backed by a partial guarantee from the UK, which analysts said removed the risk of a second rights issue for now.
To survive the pandemic so far, easyJet has already tapped shareholders for cash, said it would axe 30% of its staff, and sold dozens of its aircraft.