£4m per day winter loss for easyJet ‘better than expected’

Simon Calder
·2 min read
Sunny outlook: an easyJet Airbus A320 at Faro airport in Portugal (Simon Calder)
Sunny outlook: an easyJet Airbus A320 at Faro airport in Portugal (Simon Calder)

Britain’s biggest budget airline believes it made a loss of almost £4m per day between October 2020 and March 2021 – and says that is “better than expected”.

In a trading update, easyJet revealed its winter capacity dropped 86 per cent but passenger numbers fell even faster – by 89 per cent to just 4.1 million.

The airline’s “load factor” – the proportion of seats occupied – dropped from over 90 per cent to below 64 per cent.

That translates to 68 out of 186 seats being left empty on the average flight. The previous figure was just 18 seats.

While easyJet traditionally reports a winter loss – a year earlier it was £193m – the airline expects to lose at least half a billion pounds more when it reports to the market.

The group headline loss before tax for the six months ending 31 March 2021 is expected to be in the range of £690m to £730m.

The pre-close statement said: “Our capacity forecasting has been accurate and disciplined throughout the pandemic, which has allowed for strong cost control.

“Our focus on cash generative flying over the winter season has minimised cash burn, with cash burn in the second quarter better than guidance.”

The airline said it is “encouraged by the strong vaccination rollout in the UK and expects the European rollout to pick up pace in the coming weeks”.

The airline has raised £5.5bn to see it through the coronavirus pandemic.

At present easyJet cannot fly leisure passengers from the UK, though the government has indicated that ban will be lifted on 17 May.

The chief executive of easyJet, Johan Lundgren, said “We remain well positioned for the recovery this summer and beyond.”

But he called for the cost of mandatory PCR tests for all arrivals to the UK to be cut, saying: “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. “

In February easyJet sharply reduced its cabin baggage allowance. The airline says the new policy is “on track relative to our revenue expectations, as well as having a positive effect on our On Time Performance metrics”.

The airline raised £842m from selling 35 aircraft and leasing them back, a transaction that is expected to increase costs by £90m per year.

The airline expects to fly no more that 20 per cent of 2019 capacity between April and June 2021, due to “current travel restrictions in the markets in which we operate”.

Capacity levels will start to increase from late May onwards, the airline believes.

“We retain significant operational flexibility to enable us to capture pent-up demand and are able to ramp up flying quickly when demand returns,” easyJet’s trading update said.

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