easyJet Shrinks Losses To £169m As Bookings 'Look Positive'
November 29, 2022
British airline easyJet on Tuesday posted a loss after tax of £169 million ($203 million) for its financial year to the end of September, its third consecutive annual loss.
However, it was a big improvement on the previous year, during the worst of the Covid-19 pandemic, when the carrier recorded a net loss of £858 million, easyJet said.
“EasyJet does well in tough times,” said chief executive Johan Lundgren.
The budget airline flies mainly across Europe. In the summer, when airports were mired in chaos through cancelled flights, lost baggage and huge queues, it introduced a plan to reduce the trauma for travellers including extra customer service staff and a hotline for families with young children.
The pandemic ravaged global aviation, grounding planes worldwide and forcing airlines to slash thousands of jobs in 2020. Early bookings for the second half starting in April “look positive”, with ticket prices for the Easter holiday stronger than a year ago, easyJet said. The Luton-based carrier said it will begin summer recruitment to avoid a repeat of this year’s industry-wide labour shortages.
The low-cost carrier urged caution over “market-wide” cost increases and said its first-half fuel expense was set to be more than 50 per cent higher year-on-year due to soaring inflation.
The group’s costs — excluding fuel — jumped 106 per cent over the past year to £4.6 billion.
EasyJet is hiking ticket prices in response, though it hopes its budget offering will help it weather the cost-of-living crisis.
Low-cost airlines like easyJet are lifting capacity just as economies slow in a bet that Europeans will continue to prioritise affordable leisure travel over other discretionary spending. The UK carrier said that should help it lure more customers and grow margins while keeping a lid on costs.
Demand has recovered sharply after most lockdowns were lifted. However, airlines and airports are struggling to recruit sufficient staff after having axed so many positions.
“easyJet has achieved a record bounce back this summer,” Mr Lundgren said. “The summer saw easyJet achieve its highest ever earnings for a single quarter.”
He added that during the current “tough” economic climate, consumers would still look to go on holiday but seek out value, helping the no-frills carrier to do better than more established rivals.
“Legacy carriers will struggle in this high-cost environment,” Mr Lundgren said.
“Consumers will protect their holidays but look for value and across its primary airport network, easyJet will be the beneficiary as customers vote with their wallets.”
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