EasyJet loses £114m in three months as staff shortages and travel turmoil cause mass cancellations and delays
- EasyJet said that bookings for the fourth quarter are currently 71% of 2019 levels
- Third-quarter passenger levels skyrocketed to 22m from just under 3m last year
- The budget airline has scaled back its peak summer schedule due to disruption
EasyJet has posted another major quarterly loss despite passenger numbers surging more than sevenfold due to widespread disruption gripping British airports.
The budget airline recorded a £114million headline pre-tax loss in the three months ending 30 June, as staff shortfalls afflicting the aviation sector led to mass delays and flight cancellations.
This was still a significant improvement on the £318million loss made across the same period in 2021, when stringent cross-border travel restrictions severely depressed the volume of global airline bookings.
Disruption: EasyJet recorded a £114million headline pre-tax loss in the three months ending 30 June as staff shortages led to mass delays and flight cancellations
Yet while the loosening of curbs helped passenger levels skyrocket from just under 3 million in the third quarter last year to 22 million this time around, the unparalleled recovery in demand has left the business struggling to cope.
EasyJet has been forced to axe thousands of flights in recent months, with many caused by high incidences of positive Covid-19 tests among crew members, which particularly affected the company over the Easter weekend.
It has also scaled back its peak summer schedule, though this partly followed London Gatwick and Amsterdam Schiphol airports setting limits on daily flights during July and August in order to minimise turmoil.
Since these two airports have imposed flight caps, the firm said operations had ‘much improved’ this month and it is expecting to fly at around 90 per cent of pre-pandemic capacity levels over the fourth quarter.
The group also revealed that booking levels for the period are currently 71 per cent of 2019 volumes, while load factor – a measure of how full an aeroplane is – remains slightly ahead of their equivalent levels three years ago.
Its chief executive Johan Lundgren remarked: ‘We have taken action to build the additional resilience needed this summer, and the operation has now normalised.
Results: London Heathrow reported today that it was still loss-making, even though millions more passengers are travelling through the British Airways hub
‘Despite the loss this quarter due to the short-term disruption issues, the return to flying at scale has demonstrated that the strategic initiatives launched during the pandemic are delivering now and with more to come.’
Like EasyJet, London Heathrow reported today that it was still loss-making, even though millions more passengers are travelling through the British Airways hub.
Britain’s biggest airport made an adjusted pre-tax loss of £321million in the first half of 2022, as it spent considerable sums investing in hiring and training new staff in anticipation of demand recovering and making infrastructural upgrades.
Inbound leisure and business travel also remain weak, with the latter affected by the rise in videoconferencing over the past two years.
Heathrow said its capacity was now being constrained by a lack of airline ground handlers, a factor that led it a fortnight ago to impose a daily customer limit of 100,000 for the summer.
The airport noted this new cap was enhancing passengers’ experience of travel, with queues ‘well-managed and kept moving’ at peak times.
Disruption is continuing to happen at airports across Europe, but rather than opt for a staycation, AJ Bell investment director Russ Mould said that many holidaymakers are still desperate to get away for a foreign holiday.
He said: ‘It does look like people have been so starved of their week on the beach they’re prepared to put up with some disruption and higher costs.
‘How long that can last when household budgets are under severe pressure is open to question. Maybe you can stick a summer break on the credit card this year and worry about paying it off when you’re back. However, that’s not sustainable beyond the short term.’
EasyJet shares were up 4 per cent to 388.7p during the late morning on Tuesday, meaning their value has fallen by around a third in the past three months.