EasyJet financials took a hammering in the final quarter of the year despite an uptick in flights over Summer as travel restrictions eased.
The company’s headline loss before tax for the year ending 30 September 2021 is expected to be between £1.14bn and £1.18bn with the board opting not to issue a dividend for FY21. The losses come in spite of surging interest in travel over the past three months with the budget airline flying 13.3m passengers and catering to 17.3m seats, operating at 58 per cent of pre-pandemic levels.
Johan Lundgren, CEO of EasyJet, said “it is clear recovery is underway.”
“During the quarter easyJet significantly ramped up its flying which meant we were the second largest airline operating in Europe this summer while also halving our Q4 losses versus last year,” Lungren said, claiming that demand for flights to the Canary Islands in the October half term is at 140 per cent of 2019 levels.
Investor confidence in easyJet remains strong and the company reduced its net debt from £2bn to £0.9bn in the fourth quarter, following the successful issuance of £1.2bn worth of shares to help boost the airline’s pandemic recovery.
With jet fuel prices rising to new heights EasyJet could struggle with inflationary pressures as it heads into 2022. The airline is 55 per cent hedged for fuel in the financial year ending on 30 September 2022 if fuel is priced at US$500 per metric tonne, however the spot price as of 11 October 2021 is already much higher at US$760.
Nonetheless, EasyJet is predicting recovery to continue in the first quarter of FY22 with flight numbers at 70 per cent of pre-pandemic levels.
Share price is down 2.56 per cent today to stand at 631.40 GBX.