easyJet Cuts Full-Year Losses as Passengers Return to the Skies
Buoyed by a strong summer season, the airline has cut its full-year losses as it prepares for 2023.
Buoyed by a strong summer season, the airline has cut its full-year losses as it prepares for 2023.
DALLAS — London Luton (LTN)-based easyJet (U2) has cut its full-year losses following a strong second quarter. The low-cost carrier (LCC) has also been buoyed by strong demand for flights over the half-term, Christmas, and New Year period, despite the UK entering an economic recession.
easyJet announced a pre-tax loss of £178m (US$213m) for the 2022 financial year this morning, November 29, down from the expected £208m (US$249m). This compares to a loss of £1.14bn (US$1.36bn) for the 2021 financial year. The results were helped by record third-quarter profits of £674m (US$ 809m) between July and September, its peak summer season.
This was despite the airline's troubles during the summer, which saw hundreds of short-notice flights canceled. Like much of the aviation industry, U2 also suffered staffing shortages that severely impacted its operations.
In a statement, U2 said it was now 'investing in building additional resilience. This investment allows for summer 23 preparations to start earlier in response to the tight labor market, where we have already begun our seasonal recruitment campaign.'
Commenting on the results, U2 Chief Executive Johan Lundgren said, "easyJet has achieved a record bounce back this summer with a performance which underlines that our transformation is delivering. The summer saw easyJet achieve its highest-ever earnings for a single quarter with a headline EBITDAR of £674m, ancillaries up by 59% on FY19, and easyJet holidays well on its way to its £100m target.
"easyJet does well in tough times. Legacy carriers will struggle in this high-cost environment. Consumers will protect their holidays but look for value, and across its primary airport network, easyJet will be the beneficiary as customers vote with their wallets."
Moving forward, Mr. Lundgren said that U2 was "well placed to drive returns and margins while maintaining a rigorous focus on cost."
Its primary focus will be on its Easyjet Holiday business, which delivered a solid £38m (US$45m) in pre-tax profits. Launched in November 2019, the package holiday arm of the company aimed to shake 'up the sector with flexible, great-value holidays to handpicked hotels across Europe.' But it faces tough competition from the already established Jet2 Holidays and TUI.
"With one of the strongest balance sheets in European aviation, we are ready to take opportunities as they present themselves," Lundgren added.
"We have a clear strategy to drive returns for our shareholders and have significant confidence in our plan today and that it will deliver going forward."
Featured Image: easyJet Airbus A320 'neo livery' (G-UZHB). Photo: Lorenzo Giacobbo/Airways.
