For the very first time in its 25-year history, easyJet is reporting an annual loss. In a statement issued Thursday, the budget carrier warned of losses up to $1.1 billion. While it has raised over $3 billion in liquidity since the beginning of the pandemic, the airline’s CEO is calling for bespoke aid from the UK Government.
The ongoing pandemic and its repercussions have pushed another profitable airline into the red this year. In its trading update for the year ending September 30th, 2020, budget-carrier easyJet says it expects losses to amount to between £815 ($1.05 billion) and £845 million ($1.1 billion). This will be the first annual loss the airline has reported in its 25-year history.
“At the beginning of this year, no one could have imagined the impact the pandemic has had on the industry,” Johan Lundgren, easyJet’s CEO, said in a statement seen by Simple Flying.
“easyJet has adapted and risen to the challenges presented by the pandemic by taking decisive actions to minimise losses, bolster liquidity and reduce cash burn while launching a major restructuring programme, having completed the UK consultation and commenced consultations in a number of key countries,” he continued.
Due to travel restrictions and rapidly changing quarantine measures from the UK Government, easyJet carried only nine million passengers in the fourth quarter. Passenger numbers for the full year decreased by 50% to 48 million.
Stay informed: Sign up for our daily aviation news digest.
25% capacity for the rest of 2020
The Luton-based airline operated at 38% capacity over the summer period, saying that flying peaked in August but then tapered off again in September. However, it now expects to fly only 25% of its usual schedule for the remaining months of 2020, compared to low-cost rival Ryanair, which will operate at 40% capacity.
Meanwhile, easyJet says it will “retain the flexibility to ramp up quickly” if demand returns. easyJet also noted that, thus far, bookings for summer 2021 were in line with previous years.
Liquidity raised thus far
Since the beginning of the pandemic, easyJet has raised more than £2.4 billion ($3.1 billion) in liquidity. This includes a £600 million ($775 million) loan from the Treasury and Bank of England’s emergency coronavirus fund, with the rest composed in nearly equal measure from aircraft sales, and £419 million ($541 million) from share sales.
Government needs to “step up”
Meanwhile, Mr Lundgren believes that more financial support will be needed to see his company and its UK-based colleagues through the winter.
“Aviation continues to face the most severe threat in its history and the UK Government urgently needs to step up with a bespoke package of measures to ensure airlines are able to support economic recovery when it comes,” he continued in his statement.
The carrier said it would continue to review its liquidity position and that it was open for other sale-and-leaseback agreements, should the need arise. In June, easyJet closed such a deal with SMBC Aviation for six of its A320neos as part of its cash-raising efforts.