EasyJet expects winter losses of more than £700 million as it prepares to ramp up operations to meet summer demand.
The pre-tax loss of between £690 million and £730 million revealed in a trading update today was described by the UK budget carrier as being “slightly better than expectations”.
Passenger numbers for the six months to March 31 fell by 89% year-on-year to 4.1 million as capacity was trimmed to 6.4 million seats.
Total group revenue for the winter period was down by 90% to £235 million, with passenger revenue dropping by 91% to £165 million and ancillary revenue suffering a decline of 87% to £70 million.
The airline has operated a “disciplined flying programme” over the winter while continuing undergo major restructuring and cost cutting.
Just 20% of 2019 pre-pandemic capacity is expected to be flown in the current quarter “with an expectation that capacity levels will start to increase from late May onwards”.
The airline added: “We maintain significant flexibility to ramp capacity up or down quickly depending upon the unwinding of travel restrictions and expected demand across our European network.”
EasyJet has access to £2.9 billion of liquidity having raised more than £5.5 billion since the start of the pandemic.
The carrier is “well positioned to capitalise on the recovery of travel once restrictions are eased across the network”.
A reduced schedule will continue to be operated throughout much of the current quarter but the airline said it is “ready to ramp up our operations to match the level of demand we see in the market”.
The effects of the cost cuts will support improved margins and reduce seasonality for the future.
Chief executive Johan Lundgren said: “EasyJet has maintained a disciplined approach to flying during the first half of our financial year, resulting in a first half loss and cash burn better than expectations.
“We continue to have access to significant levels of liquidity alongside easyJet’s major cost-out programme which continues to deliver ongoing cost and efficiency benefits. All of this positions us well to lead the recovery.
“We welcome the confirmation by the UK government that international travel is on track to reopen as planned in mid-May.
“EasyJet was founded to make travel accessible for all and so we continue to engage with government to ensure that the cost of the required testing is driven down so that it doesn’t risk turning back the clock and make travel too costly for some.
“We continue to closely monitor the situation across Europe and with vaccination programmes accelerating, most countries are planning to resume flying at scale in May.
“We have the operational flexibility to rapidly increase flying and add destinations to match demand.”
The carrier “is ready to resume flying, prepared for the ramp up and looking forward to being able to reunite people with their families or take them on leisure and business flights once again,” he added.
“As a result, we remain well-positioned for the recovery this summer and beyond,” Lundgren said.
Full results for the six months ending March 31 are due to be released on May 20.