EasyJet to reveal £1bn losses after covid travel curbs

EasyJet is set to reveal losses hit more than £1bn last year as Covid wreaked havoc on the travel industry.

The airline group has suffered a turbulent 12 months on the back of fluctuating travel restrictions across Europe, which caused the business to cut flight numbers heavily as holidaymakers stayed in the UK.

In a trading update last month EasyJet said pre-tax losses for the 12 months to September are expected to be between £1.13bn and £1.17bn, slightly lower than analyst predictions.

Sign up to our Business newsletter

Sign up to our Business newsletter

Chief executive Johan Lundgren said a surge in demand across Europe and a return of bookings to winter sun destinations like Egypt and Turkey had allowed it to ramp up flight capacity to nearly 60 per cent of pre-pandemic levels.

Investors will be looking for reassurance from EasyJet this week. Picture: David Parry/PA Wire

He said: “October half-term bookings have been strong, particularly to the Canary Islands, where we have increased our capacity to around 140 per cent of full-year 2019 levels.”

But investors will be eager to hear whether plans to increase capacity to 70 per cent of pre-pandemic levels will go ahead.

Russ Mould, investment director at AJ Bell, said the new variant was “the worst possible news for airline operators” as they were starting to see a rebound in demand.

He said: “These companies have been under significant financial stress and will want to avoid having to go back to shareholders yet again to ask for more money to help see them through bad times, should we get new widespread travel restrictions.”

Saturday’s announcement of the introduction of compulsory PCR tests for Covid-19 for everyone arriving in the UK has been described as a “huge blow” for the travel industry.

Abta, a trade association for tour operators and travel agents in the UK, said the added cost of testing for all arrivals to the UK will have an impact on customer demand for holidays, adding pressure to an industry which has been among the “hardest hit” during the pandemic.

The announcement of the new testing requirement came after two cases of the Omicron variant were confirmed in the UK.

Without a negative result, people will have to self-isolate for 10 days.

New restrictions are beyond the control of travel bosses, but investors will be on tenterhooks for reassuring noises as to how EasyJet could mitigate the impact of further disruption to flights over the winter.

Support The Yorkshire Post and become a subscriber today.

Your subscription will help us to continue to bring quality news to the people of Yorkshire. In return, you'll see fewer ads on site, get free access to our app and receive exclusive members-only offers.

So, please - if you can - pay for our work. Just £5 per month is the starting point. If you think that which we are trying to achieve is worth more, you can pay us what you think we are worth. By doing so, you will be investing in something that is becoming increasingly rare. Independent journalism that cares less about right and left and more about right and wrong. Journalism you can trust.

Thank you

James Mitchinson