easyJet PLC (LON:EZJ) has forecast a swing to a massive full-year loss and said it will fly at only 25% of planned capacity in the quarter to end December 2020.
The budget airline said early booking levels for summer 2021 are in line with previous years and it retains flexibility to ramp up quickly if demand returns and coronavirus pandemic restrictions are eased.
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In the year to September 30, 2020, easyJet's loss before tax is expected to be £815mln-£845mln, compared to the £427mln profit recorded a year earlier, so the firm is not declaring a dividend.
Total headline cost in the year to September 30 dropped by 36% to £3.8bn mainly driven by a decrease in capacity flown. The group's full-year fuel cost is expected to be around £720mln, with £145mln of hedge ineffectiveness.
At year-end, the airline's net debt position was £1.1bn including cash and cash equivalents of £2.3bn. Cash burn in the quarter to September was better than estimated at £700mln, down from £774mln in the previous three months.
In its fourth quarter, easyJet flew at 38% of planned capacity with a 52% peak in August.
The budget carrier said it has concluded consultations to lay off a third of its UK staff while it is still negotiating with unions in Germany, Portugal and Switzerland. The job cuts are going to cost the group £120mln in the second half of the year.
As part of its cost-cutting programme, the group has also closed its bases in Southend, Stansted and Newcastle, although Stansted and Newcastle continue to be served on an inbound flying basis.