easyJet PLC trimmed its losses in the first half as it increased capacity back towards pre-pandemic levels, though it continued to be hampered by increasing numbers of crew testing positive for Covid-19.
The budget airline, which has cancelled hundreds of flights in the past few days, said its half-year losses would be between £535mln and £565mln, which was below the £618mln average City forecast. A year earlier it made a £701mln loss and for the full year it was £1.1bn.
For the second quarter to 31 March, 67% of capacity was flown, up from 60% in the first quarter, with March at 80% capacity. Passenger numbers of 11.5mln for the quarter were up nearly tenfold on the preceding period.
Over the last seven days, easyJet revealed its has cancelled 6% of its scheduled flights, amid increases in the number of crew testing positive for Covid-19.
"We have proactively managed this in advance by making pre-emptive cancellations as early as possible, enabling the majority of our customers to rebook onto flights departing the same day," it said.
For the third quarter, capacity is expected to be around 90% of 2019 levels, with sales for the fourth quarter said to be “near” equivalent levels from the year before the pandemic.
With oil prices elevated and a metric tonne fetching around US$1,100 yesterday, the FTSE 250 company said it has around 64% hedging for the second half of the year at circa US$571 per tonne, around 42% hedging for the first half of next year at roughly US$654 and is about 15% hedged for the second half of next year.
Chief executive Johan Lundgren said: “Since travel restrictions were removed, easyJet has seen a strong recovery in trading which has been sustained, resulting in a positive outlook for Easter and beyond, with daily booking volumes for summer currently tracking ahead of those at the same time in FY19.”
The shares rose in initial trading before dropping into the red and were down 1.7% to 533.5p by mid-morning.
Allegra Dawes, senior airlines analyst at Third Bridge, said the capacity increases do point to the market’s continued recovery, but the company "faces rising costs due to fuel pricing and operation ramp up and continued operational difficulties as a result of covid-19 and staffing shortages. The road to a full recovery remains long and bumpy."
While easyJet is not exposed to routes in the Ukraine or Russia, ThirdBridge analysts expect volatility in jet fuel pricing to further slow the pace of the airline's recovery.
“EasyJet has lost ground within the low-cost segment of the market as Ryanair and WizzAir have both operated more efficiently and aggressively during the pandemic. While EasyJet has lost ground in markets like Italy and Spain, it has a strong position on routes to Portugal and France, positioning it to benefit from summer travel to these countries," Dawes said.
With challenges at its key bases in the UK from staffing shortages, she said "customers and investors will be concerned over the airline’s ability to ramp up operations to meet higher demand in the summer holiday season and Third Bridge experts expect to see continued delays, cancellations, and frustration for passengers".