COVID Strikes EasyJet
British airline EasyJet has posted its first full-year loss in its 25-year history as a result of the coronavirus pandemic but laid out hope that the rollout of vaccines will help it bounce back strongly next year.
$1.7 Billion Loss
The airline reported Tuesday a pretax loss of 1.27 billion pounds ($1.7 billion) for the year through September as passenger numbers halved to 48.1 million. The summer was particularly tough, with the airline flying just 38% of its planned capacity during the peak holiday season.
The share price has also decreased by 2.2% following the earnings release.
Last year, the group had made a profit of 430 million pounds for the previous full-year.
EasyJet is ‘Optomostic’ About Vaccine
Chief Executive Johan Lundgren said the company had responded “robustly and decisively” to the crisis and cheered “welcome news” on a possible vaccine. Already this month two candidate vaccines have revealed positive results, which has raised hopes that everyday life around the world could be returning to normal in the first half of next year.
Still, the vaccine or vaccines are not expected to come through quickly enough to salvage the winter season for the aviation industry, with airlines everywhere slashing capacity.
EasyJet Winter Season In Jeperdoy
EasyJet announced that it does not expect to fly more than 20% of its planned services in October through to December. This is less than the projected 25% EasyJet announced earlier on this year.
In a statement, the Chief Executive said:
While we expect to fly no more than 20% of planned capacity for the first quarter of 2021, maintaining our disciplined approach to cash generative flying over the winter, we retain the flexibility to rapidly ramp up when demand returns,” he said.
“We know our customers want to fly with us and underlying demand is strong.”
EasyJet Cost Cutting
As a direct result of the COVID-19 pandemic, EasyJet has cut around 4,500 jobs, including around 737 pilots. Further to this, the airline has sold and leased back 33 aircraft, raising £38 million. It now owns 55 percent of its fleet.
EasyJet to date has raised approximately 3.1 billion pounds, some of which has come through an emergency loan program from the Bank of England.
It is fair to say that EasyJet, like most airlines, is facing unprecedented times however, as the EasyJet CEO says, the long-term optimism of a vaccine is light at the end of the tunnel and perhaps will make the winter season somewhat more bearable.