EasyJet hopeful of recovery as travel restrictions ease

EasyJet paid out a further £112 million in refunds during Q3, taking its total refund outlay during the pandemic to £1.2 billion. Around £230 million remains tied up in vouchers held by customers.

Q3 passenger numbers increased to three million and capacity to 4.5 million seats, up significantly on the 117,000 passengers flown in Q3 2020 during the height of the first wave of the pandemic. Q3 capacity, though, remained 83% down on 2019 levels.

Load factors have steadily increased throughout the quarter from 52% in April to 68% in May when the UK government lifted its ban on outbound leisure travel and finally to 72% in June, averaging 66% for the quarter.

EasyJet said it achieved this by switching significant capacity from the UK to the EU, most notably reallocating UK-Palma capacity to Berlin "to serve stronger traffic flows" in Europe.

Additional UK capacity was laid on in late-June for green list destinations such as Malta and Madeira, including several new routes, and on 74 amber list routes following the UK government’s 8 July decision to lift quarantine for fully vaccinated amber list arrivals from Monday (19 July).

The airline said it had also capitalised on the collapse of Aer Lingus Regional operator Stobart Air in June to "further build out" its domestic leisure network, adding 12 new UK domestic routes and "topping up" capacity on others.

Additionally, it has sought to take advantage of another summer of heightened demand for domestic leisure travel. "In response to the continuing UK government travel restrictions, we have focused capacity on UK domestic leisure opportunities, notably to Jersey, Bournemouth and Newquay," said easyJet.

’Confident’

However, owing to the difference between UK government and EU travel policy, bookings were "heavily skewed" towards continental Europe. "While our business is normally split 50:50 between the UK and Europe, at present, two-thirds of bookings are coming from Europe."

With passengers continuing to book closer to departure, intra-EU capacity is more sold than ex-UK capacity, which easyJet said was "due to the uncertainty around government restrictions" – although it does expect this gap to narrow quickly as the UK eases its travel restrictions.

UK capacity is currently 44% sold, compared with 69% at the same stage in 2019, while intra-EU capacity is 53% sold, compared with 64% at the same point in 2019.

"We remain confident about demand for travel this summer and into autumn, due to the bookings surges experienced following selective easing of travel restrictions," said easyJet, citing the UK government’s decision to waive quarantine for fully vaccinated amber list arrivals.

EasyJet added it expecting pricing to be "relatively benign" over the coming months