EasyJet posts £1.3bn loss and extends rescue loan
Flight schedule cut back as quiet Christmas expected
EasyJet has slumped to a £1.3bn loss annual loss, the first in its 25-year history as Covid-19 swept historic disruption through the aviation industry.
The low-cost airline on Tuesday said it only expected to fly a fifth of its normal schedule for the rest of this year, as it tried to keep losses to a minimum with demand for flying anticipated to be low even over the traditionally busy Christmas season.
EasyJet’s chief executive Johan Lundgren has long called for more government support to help airlines through the crisis.
On Tuesday, he announced that the carrier had agreed an extension to the repayment of a £600m UK government rescue loan to help it manage its finances through the winter season. The company will repay the loan in two stages in March and November, rather than in full in March.
EasyJet, which had already warned it was facing its first ever full-year loss, reported a £1.27bn pre-tax loss for the year to September, including £438m of non-recurring costs such as ineffective fuel hedges and costs related to a broad restructuring.
The company has built up reserves of £3.1bn to last it through the crisis, including the Bank of England loan and selling off its planes, which it has leased back.
The losses bring down the curtain on a grim earnings season for Europe’s largest airlines. A second wave of infections and new travel restrictions has extinguished hopes of a swift recovery following nine months of crisis.
Still, Mr Lundgren said two positive vaccine test results in 10 days have offered the industry some “welcome news”.
EasyJet’s shares have risen more than 40 per cent since Pfizer and Moderna announced successful test results for their coronavirus jabs, although they remain 45 per cent lower this year.