Easyjet today fell to the first loss in its history as the full impact of the coronavirus pandemic was revealed.
The low-budget carrier posted a reported loss before tax of £1.2bn for the year ending 30 September after the worst crisis in aviation history.
Passenger numbers halved over the course of the year, falling from 96.1m to 48.1m in total, as travel restrictions and quarantine policies squashed demand.
Between March and June, the carrier’s entire fleet was grounded as countries around the world put in place stringent lockdown restrictions.
Easyjet added that it expected to fly just 20 per cent of capacity for the first quarter of the new financial year, with international leisure travel currently banned in the UK.
However, the prospect of not one but two effective coronavirus vaccines has seen shares and bookings surge in recent weeks.
According to chief exec Johan Lundgren, bookings for next summer are currently ahead of last year’s levels.
He told City A.M. that he had been “pleasantly surprised” by the recent announcements, but said that the airline industry need any vaccine to be used in conjunction with an airport testing programme.
“Both testing and a vaccine will make sure that people would feel more confident in making travel arrangements”, he said.
“The reason why people are not flying now is not because they are afraid of flying, but because they are not willing to quarantine for 14 days.”
Transport secretary Grant Shapps has suggested that the government will look to slash the quarantine period by up to seven days once the current lockdown ends.
Lundgren added that an effective vaccine could well see the industry recover to pre-pandemic levels far quicker than previously expected.
Many airlines have said that they do not expect passenger numbers to recover to 2019’s levels until 2024 or 2025.
Having risen about 50 per cent in November, shares slipped back 3.7 per cent on today’s results to trade at 748.6p.
In addition, revenue also fell 52.9 per cent to a shade above £3bn, down from £6.4bn last year.
As a result of the crisis, Easyjet said that it had raised £3.1bn in liquidity for the year, while its debt pile stood at £1.1bn.
The firm pulled its dividend for the full year, and said that it would not be providing any other financial guidance.
Lundgren said that the carrier was in prime position to lead the comeback for airlines when the situation allows.
“Easyjet has not only withstood the impact of the pandemic, but now has an unparalleled foundation upon which to emerge strongly from the crisis. Our unmatched short haul network and trusted brand will see customers choose easyJet when returning to the skies”, he said.
“While we expect to fly no more than 20 per cent of planned capacity for Q1 2021, maintaining our disciplined approach to cash generative flying over the winter, we retain the flexibility to rapidly ramp up when demand returns.”
He also told the BBC that on the day that Pfizer announced that its coronavirus vaccine was 90 per cent effective, bookings rose 50 per cent, suggesting that there is still strong demand for air travel.