(London) British airline EasyJet is suffering the first annual loss in its 25-year history and is concerned about the difficult months ahead as air traffic has been badly hit by the health crisis.
Posted Oct 8, 2020 at 6:56 AM
The airline announced in a statement on Thursday a pre-tax loss of between £ 815 million and £ 845 million for the 2019-2020 fiscal year ending at the end of September (between € 895 million and € 928 million).
"This year will be the first time in its history that EasyJet has suffered a loss," said Johan Lundgren, CEO of the company.
The number of passengers carried fell by 50% to 48 million in the year.
The airline, founded in 1995, was mainly affected by the suspension of its flights in the spring due to lockdowns and travel restrictions in Europe, which lasted it.
It then resumed its flights since June 15, but given the demand at half-mast, it reduced its capacity to 38% of what was planned for the summer period from July to September, ie the fourth quarter of its fiscal year.
EasyJet also specifies that it forecasts a pre-tax loss of between £ 295 and £ 325 million for the last quarter, which should be lower than the third quarter.
Mr. Lundgren is very careful in the coming months.
EasyJet will run at only 25% of its planned capacity between October and December, i.e. the first quarter of the 2020-2021 fiscal year, due to quarantines imposed by the UK on several countries such as France and Spain , and like Europe is trying to stop the resurgence of the virus.
"The aviation industry continues to face the most serious threat in its history and the UK government needs to act urgently with a series of specific measures so that airlines can help in the recovery of the economy," emphasizes the leader.
British Transport Secretary Grant Shapps promised him an imminent announcement on Wednesday about setting up tests for travelers arriving in the country, which could shorten the quarantine period.
These measures "would be tremendous support, but there are many other factors weighing on demand, such as unemployment and fear of the virus itself," warns Neil Wilson, an analyst at Markets.com.
The company notes that the first reservations for the summer of 2021 are at the level of previous years.
In view of the financial losses, no dividend will be distributed for the 2019-2020 financial year.
In response to this release, the stock lost 0.80% at around 5:20 ET on the London Stock Exchange.
To survive this crisis, EasyJet has significantly increased its cash flow in recent months to £ 2.4 billion since the start of the pandemic.
For example, he raised £ 419 million through a new share offering and a £ 600 million loan from the UK government. EasyJet also negotiated Airbus orders.
“There will be a long period of uncertainty before we see whether next summer is good enough to prevent further strengthening of finances. But EasyJet seems ready for now, ”said Wilson.
Like its competitors, the group had already announced up to 4,500 job cuts, or nearly a third of its workforce. In particular, it decided to close its bases at Stansted near London, Southend in the East of England and Newcastle in Scotland.
EasyJet said on Thursday that it had successfully completed consultations with its staff in the UK, which should help avoid layoffs.
Discussions are ongoing in Germany, Portugal and Switzerland.