Easyjet announced this morning it is in line for a pre-tax loss of up to £845m for the full year, the first time the budget carrier will have reported an annual loss.
In a trading update, the carrier said passenger numbers for the full year had halved, falling to 48m as a result of the coronavirus pandemic.
Shares in the airline fell three-quarters of a per cent as markets opened.
In the final quarter, Easyjet flew around 9m passengers at 38 per cent of its pre-pandemic capacity.
It had aimed to fly at 40 per cent capacity, but the reimposition of quarantine restrictions across European destinations hampered its progress.
As a result, group revenue for the quarter came in at £620m, down almost three-quarters from last year’s £2.3bn.
For the three month period, the airline reported a loss between £295m and £325m, swinging into the red after last year’s £528m profit.
However due to the reduction in capacity due to the pandemic, group costs shrank 47 per cent to £935m.
Easyjet said that its cash position stood at £2.3bn as of the end of September, with net debt of £1.1bn.
Why it’s interesting
Easyjet said that based on the current travel restrictions, it expected to fly just 25 per cent of capacity in the first quarter of the new financial year.
As of this morning, travellers can go to just seven European countries without needing to quarantine for 14 days on return.
It had been hoped that the government would announce plans to put in place an airport testing regime by the end of the month, but yesterday it instead announced a new review of the plan.
Last night Sky reported that Easyjet had warned ministers that it might need more financial support for the government as it heads into the traditionally loss-making winter season.
The carrier has already drawn down £600m from the Bank of England’s Coronavirus Corporate Financing Facility (CCFF).
However, it said that pre-bookings for next summer were in line with last year.
What Easyjet said
Chief executive Johan Lundgren said: “At the beginning of this year, no one could have imagined the impact the pandemic has had on the industry.”
“Aviation continues to face the most severe threat in its history and the UK Government urgently needs to step up with a bespoke package of measures to ensure airlines are able to support economic recovery when it comes,” Lundgren added.