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EasyJet calls for urgent state support as it braces for first annual loss

Holly Williams, PA Deputy City Editor
·2-min read

Low-cost airline easyJet has called on the Government for an urgent rescue package for the sector, as it braces for the first annual loss in its 25-year history.

The group said it is set to slump to an underlying loss of between £815 million and £845 million for the year to September 30, after seeing passenger numbers halve as the coronavirus crisis crippled the industry.

The Luton-based carrier called on the Government to deliver “bespoke” help for the airline sector amid reports it has told Whitehall it may need further financial support if the pandemic continues to batter demand.

It said it continues to keep its finances under review and “assess further funding opportunities”.

Johan Lundgren, chief executive of easyJet, said: “This year will be the first time in its history that easyJet has ever made a full-year loss.

“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.”

It saw losses reach between £295 million and £325 million in its fourth quarter, which were lower than those in the previous three months when planes were grounded during the lockdown.

EasyJet flew just 38% of its planned capacity between July and September – normally the peak summer holiday season.

Flying peaked in August and then fell significantly in September when customer demand was hit by changes in government travel guidance and quarantine rules, according to the group.

Over the full year, passenger numbers tumbled by 50% to 48 million.

It is expecting to fly only about 25% of its planned services in the quarter to the end of December.

Holidaymakers are booking at a “very late stage” and demand for destinations is shifting rapidly due to ever-changing quarantine rules, it added.

The group recently agreed a deal with unions to avoid compulsory redundancies as it looks to slash its cabin crew and pilot workforce by up to 30%, or 4,500 jobs.

Shares lifted 2% as investors focused instead on easyJet’s financial strength to ride out the crisis, with £2.3 billion of cash reserves, and the fact the group stands poised to ramp up flights if demand and restrictions allow.

Susannah Streeter, senior investment and markets commentator at Hargreaves Lansdown, said: “EasyJet is facing the worst crisis in its history and like its transatlantic peers, the company is now being forced to play a waiting game, to see if its call will be answered and a rescue package will land to help it navigate through this crisis.’’