easyJet’s Q3 trading update saw the airline fall to a loss of £318 million ($434 million), which wasn’t unexpected. Despite this, the airline is keenly looking to the future, adding in capacity to fly at just 40% below 2019 levels in the coming quarter. By the end of the year, we could see the European low-cost carrier back to more than 75% of its 2019 flying.
easyJet posts another loss but looks to the future
UK-based low-cost airline easyJet has posted a loss of £318 million ($434 million) for the most recent quarter, the third in its financial year. Despite this, it is set to resume taking deliveries of its A320neo family jets in the autumn, and is already looking to boost its flying capacity.
For the fourth quarter of its financial year (July to September), the airline will add back capacity to take it up to 60% of its 2019 levels. This is a significant uptick from the 17% of 2019 level flying it conducted during the most recent quarter.
easyJet has flexed its agility during the quarter, entering new markets and adding in capacity where it sees opportunity. CEO Johan Lundgren noted that this flexibility has allowed it to remain competitive, despite the challenges it has faced. He said,
“We have used our existing strengths like our network with renewed purpose – pivoting capacity to Europe where we saw the strongest demand and the very way we have approached the challenges that we faced means we have adapted and built back stronger for the future.
“As a result, we will emerge from the pandemic with longer-term wins alongside baked in sustainable cost reductions, responding effectively and in ways our competitors don’t or can’t.”
The airline has successfully raised an impressive £5.5 billion ($7.5 billion) in liquidity since the start of the pandemic. It has access to a further £2.9 billion ($4 billion) of liquidity to see it through any further upheaval. Thanks to its rigorous cost-cutting measures, the airline’s cash burn for the quarter was minimized to £55 million ($75 million), which was lower than expected.
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Ramping back up
Looking at data from Cirium, easyJet has restored the promised 60% of capacity for the third quarter of 2021, or thereabouts. Flights are up to 103,000, 41% below 2019 levels, while available seat miles are up to 13.5 billion, just 37% below where it was in 2019.
Comparing this to activity in the third quarter of 2020, flights are up 53.9%, with 39.5% more available seat miles. In fact, easyJet has been flying more capacity in 2021 since mid-May and continues to ramp up its schedule as we head through the year.
By December, the airline has scheduled in more than 75% of its 2019 capacity. Flights will be up to 35,000, compared to 46,000 in December 2019. Going into 2022, we can see that the flight capacity is tracking only slightly below that of its 2019 capacity.
Of course, everything could change between now and then. With the UK fully unwinding its COVID measures since Monday this week, it remains to be seen how that affects case rates and the potential emergence of new variants, all of which could have an effect on flying abilities in the coming months.
Nevertheless, the outlook from easyJet’s side is very optimistic, and a refreshing change from the difficulties it has experienced over the past 18 months.