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easyjet shifts focus to Europe as UK travel recovery stalls

Two-thirds of bookings currently originate from within Europe compared to 50:50 normally

easyJet plc -

Easyjet PLC (LON:EZJ) said two-thirds of bookings currently originate in Europe as losses reduced slightly in its latest quarter.

Revenues in the three months to June 2021 were £212mln compared with just £7mln a year earlier, when COVID-19 restrictions meant the airline was grounded for all but two weeks.

EasyJet flew 3mln passengers this quarter or 66% of capacity, but this is just 17% of flights at the same time in 2019.

Based on current travel rules, easyJet expects to fly up to 60% of 2019’s fourth-quarter schedule in the current three months but this is subject to change in line with restrictions.

Losses for the quarter were £318mln (£348mln), which was helped by a reduction in average weekly costs to £34mln against earlier guidance of £40mln. Net debt was steady at £2bn.

The airline said it had switched capacity during the quarter from the UK to EU for this summer, as traffic flows are stronger within Europe.  

“As a result of the current divergence in government travel policies, easyJet's bookings for this summer are heavily skewed towards continental Europe. Whilst our business is normally split 50:50 between the UK and Europe,” it said. 

More flights have been laid on between the UK and amber list countries recently exempted quarantine, including Spain, Greece, Portugal, and Cyprus and the carrier said it was still hopeful of a return of passengers as restrictions are eased further.

“We remain confident about demand for travel this summer and into autumn, due to the bookings surges experienced following selective easing of travel restrictions, such as the 400% increase in week-on-week flight bookings seen following the waiving of quarantine for fully vaccinated passengers returning from Amber list destinations." 

People though are booking much later, added the airline with currently 49% of the fourth-quarter schedule booked, compared to 65% in 2019.

Booking rates on UK flights have been lower than intra-EU flying due to the uncertainty around government restrictions but again easyJet expects this to improve quickly as restrictions are lifted.

UK-touching capacity is 44% sold (compared to 69% at this point in 2019) and intra EU capacity is 53% sold (compared to 64% at this point in 2019).

EasyJet added it will also move quickly to acquire slots in desirable airports if the current incumbents are forced to sell or go out of business.

“We have recently acquired slots in Milan-Linate, Amsterdam-Schiphol and Paris-Orly,” said the statement.

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