Omicron hits Easyjet bookings as losses swell to over £1bn
Easyjet said this morning that its losses have jumped to more than £1.1bn, and the airline’s bookings are currently impacted by concerns over the Omicron Covid variant.
In the year ending 30 September, the carrier registered a 52 per cent decrease in revenue, going down to £1.4bn. Due to air travel restrictions and lockdowns implemented all across Europe, capacity decreased to 28.2 million seats, while passenger revenue and ancillary revenue went down to £1bn and £458m respectively.
While stressing it is “too soon to say” what the exact impact of the new variant will be, the airline remained positive as it retained £4.4bn of liquidity.
“Easyjet is moving through the pandemic with renewed strength having transformed the business by optimising our network and flexibility, delivering significant cost savings while also step-changing ancillary revenue,” said the airline’s chief executive Johan Lundgren.
As capacity for next summer is already ahead of FY2019 levels, the company has expanded its fleet by 25 aircraft, adding slots in key hubs such as London Gatwick and Milan Linate.
“These initiatives alongside our strong, investment grade, balance sheet provide Easyjet with renewed strength to manage any further Covid related travel disruptions, as well as a platform to fast track our growth and deliver strong shareholder returns.”
Easyjet added it continued to see “good levels of new bookings for the second half”, with the company expecting “a return to near pre-pandemic levels of capacity” in the fourth quarter of 2021/2022.
Uncertainties, such as the impact of the Omicron variant on air travel, did not impact Easyjet’s confidence that it will be able to weather the latest Covid storm.
“In summary, we remain mindful that many uncertainties remain as we navigate the winter, but we see a unique opportunity for easyJet to win customers and take market share from rivals in this period,” Lundgren added.
Analysts agreed with Lundgren’s comments and highlighted Easyjet’s strong position in the market. “Having raised equity earlier in the year, the airline is sitting on ample liquidity to see it through oncoming headwinds, while it has also used the pandemic to make a meaningful difference to its cost base and operations,” said Brewin Dolphin’s senior investment manager John Moore.
“There is undoubtedly going to be some turbulence ahead, but easyJet has put itself in a good position to navigate its way through those challenges.”
The carrier announced yesterday the extension of its Protection Promise policy, which allows customers to change their flights for free, until 31 March 2022.
“We know that flexibility continues to be crucial for our customers, so we’ve extended our Protection Promise,” said Sophie Dekkers, Easyjet’s chief commercial officer.