EasyJet trims winter losses after unlocking post-Covid demand
James ChappleEasyJet has cut its winter losses by nearly £120 million, putting the rebound down to successful efforts to unlock pent-up post-pandemic travel demand.
The airline on Thursday (18 May) recorded a headline pre-tax loss of £421 million during the six months to 31 March 2023 (H1), up from a loss £540 million a year earlier.
EasyJet holidays, meanwhile, achieved a £10 million H1 headline profit before tax, up from a £5 million loss during the same period last year.
Chief executive Johan Lundgren said the group would "enter the summer with confidence", buoyed by "strong demand" for its flight and holiday product.
EasyJet will open a new base at Birmingham airport next summer (2024) where it will station three aircraft, while easyJet holidays will expand into Switzerland, with plans to grow into "a number of planned new European markets".
The carrier also pointed towards new research, highlighting how travel remains the UK’s number one discretionary spending priority as customers "safeguard" their holidays.
"All of this progress should result in the acceleration in the delivery of our medium-term targets while we continue to also capture the opportunities ahead," Lundgren added.
Total first half revenue increased by 80% from £1.5 billion to just shy of £2.7 billion, outstripping growth in headline costs as the group continues to ramp up operations post-pandemic.
Group headline costs increased by 52% during H1 from £2billion to £3.1 billion, driven primarily by higher fuel costs and "industry-wide inflationary pressures".
During its third quarter (three months to 30 June), EasyJet expects its per seat revenue to come in 20% higher than it was a year ago.
It has also seen booking trends continue to transition back to "normalised" levels; the carrier is 73% booked for the third quarter, one percentage point ahead of where it was this time last year, and 36% booked for the fourth quarter, peak summer, three percentage points ahead of last year.
"EasyJet is starting to benefit from actions taken over the past 18 months," said the carrier in a trading update on Thursday. These include allocating – or reallocating – aircraft to its most profitable routes, continuing to focus on driving ancillary revenue, and keeping a tight handle on costs.
EasyJet will bring new slots at Lisbon airport into use for the first time this summer, while Greek island capacity this summer is up by two-thirds.
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