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easyJet cuts traffic guidance and plans price hikes as summer demand returns

Published: 07:46 20 Jun 2022 BST

easyJet PLC -

easyJet PLC (LSE:EZJ) released a summer trading update for the year today, trimming its passenger traffic guidance and planning price increases as it outlined new measures to address flight caps at Gatwick airport.  

It said “demand for travel has returned”, reporting that passenger occupancy for April and May this year was seven times as high as it was a year ago and for the current quarter ending 30 June it expects capacity to reach 87% of 2019 levels.

This was down from the 90% guidance it gave at the time of its interim results in May, while expectations for the fourth quarter to 30 September have been cut to 90% of 2019 levels from 97% guidance last month.

The budget airline announced several special measures to deal with the new limits imposed at two of Europe’s airports.  

London Gatwick and Amsterdam airport in the Netherlands recently announced unprecedented caps on flight numbers. Gatwick, which usually operates 900 flights in August, said it would curb the number of flights at the airport during the busy summer season at 825 per day during July and 850 during August.  

easyJet blamed the woes affecting the flight industry on the “post covid supply chain” and a “tight labour market”, which it said have led to air traffic control delays and staff shortages in ground handling and airports.  

These factors have increased the turnaround time and delayed departures, leading to flight cancellations, it said. 

The airline operator said it is consolidating flights across affected airports to mitigate these caps and expects to rebook most of its customers on alternative flights, possibly to travel on the same day.  

easyJet chief executive Johan Lundgren said: “While in recent weeks the action we have taken to build in further resilience has seen us continue to operate up to 1,700 flights and carry up to a quarter of a million customers a day, the ongoing challenging operating environment has unfortunately continued to have an impact which has resulted in cancellations. 

“Coupled with airport caps, we are taking pre-emptive actions to increase resilience over the balance of summer, including a range of further flight consolidations in the affected airports, giving advance notice to customers and we expect the vast majority to be rebooked on alternative flights within 24 hours.” 

easyJet said booking momentum has continued and that demand for travel this summer is strong, but reported ongoing price increases.  

The airline has sold 86% of available tickets for the current quarter but said prices are up 2%, adding that its prices will increase 14% in the fourth quarter.  

It warned that current disruption and resilience measures such as new “wet leased aircraft”, crew and airport charges, will all impact its costs. 

The airline said it expects to exceed previous projections for operating costs, saying it will "exceed previously provided operating CASK ex fuel guidance”, but said the cost impact should be a one-off. 

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