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Summary
- Despite summer uncertainty, EasyJet readies 90 per cent of its fleet to match demand.
- EasyJet has reported a headline loss before tax of £701 million for the half-yearly period ending 31 March 2021.
- The company’s passenger numbers plunged from 38.6 million in H1 2020 to 4.1 million in H1 2021.
- The company’s load factor plummeted to 63.7 per cent for H1 2021.
The Covid-19 pandemic has severely hurt the aviation business all over the world, with all the airline companies reporting heavy losses. Low-cost airline EasyJet plc is another big name which has reported heavy losses in the last few days; the company’s revenue slumped by 90 per cent for the H1 ending 31 March 2021.
Despite reporting a half-yearly loss, EasyJet Plc (LON: EZJ) said that it was readying to ramp up its summer flight schedules with an easing of coronavirus restrictions. At the same time, given the uncertainty around the international travel rules, the travel firm said that it was unable to give any guidance for full-year financial expectations.
The firm informed that it was losing approximately £5.5 million on a daily basis, as majority (85 per cent) of its overall services still remain grounded. Since the beginning of the pandemic, the firm had made over 2,000 of its employee redundant, nearly 33 per cent of its total workforce.
A recent ban on international leisure air travel by the UK government saw passenger numbers plummet drastically across all the major airlines’ companies. The travel company said that the recent trend for late bookings as a result of the last-minute changes to travel restrictions was likely to impact load factors.
Johan Lundgren, the airline’s chief executive, said that the company had the capability to operate nearly 90 per cent of its current fleet during summers to match up any pent-up demand.
The airline added up over 105,000 seats on flights when the UK government announced its ‘green list’ of nations– from which the British travellers will not be needed to self-quarantine on return. Lundgren said that the UK government’s global travel approach was confusing. He insisted that the EU health data suggested that the majority of European nations were already ready to be moved to the green list.
EasyJet’s rival Ryanair Holdings Plc (LON: RYA) had also recently posted losses in its financial results for FY 2021.
Also Read: Aviation Stocks Fall After UK Govt Releases ‘Green List’ For Future Travel
Financial highlights
- EasyJet has reported a headline loss before tax of £701 million for the half-yearly period ending 31 March 2021 (H1 2020: £193 million loss).
- The group revenue dropped around 90 per cent to £240 million.
- The firm managed to cut costs by 59 per cent in H1 2021. EasyJet has implemented a cost-cutting programme that is expected to deliver £500 million savings by the end of this year.
- EasyJet’s headline costs excluding fuel dropped to £844 million for this year’s first half (H1 2020: £2,041 million).
- The low-cost flyer’s capacity is expected to be around 15 per cent of the 2019 levels from April to June this year.
- The company’s passenger numbers plunged from 38.6 million in H1 2020 to 4.1 million in H1 2021.
- But given the uncertainty surrounding travel restrictions, it provided no firm capacity plan for the July to September quarter.
- The company’s load factor plummeted to 63.7 per cent for H1 2021 (H1 2020: 90.3 per cent).
Also Read: Uncertainty in The Travel Sector Deepens, Focus On 3 FTSE Aviation Stocks
Stock performance
After the announcement of results, the company shares were trading lower by 2.34 per cent at GBX 960.60 at 11.49 AM today.
