EasyJet: Large first half loss due to pandemic

  •   04/06/2021 - 07h31
  •   DEHOUI Lionel

The British airline EasyJet announced a few weeks ago that it intends to maintain its 1,800 jobs in France. It hopes to achieve this, in particular, through agreements with trade unions. The company, which claims to be the second largest French airline, has also just reported on its activity for the first half of the year.

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EasyJet: Large first half loss due to pandemic

Significant losses incurred by the group

In the first half of the year (October 2020 to March 2021), EasyJet made a pre-tax loss of £701 million. A year ago, the low-cost airline was making a loss of 193 million pounds. This widening of the loss is mainly due to the health crisis.

It is still in line with the company's guidance, which is in the range of -690 million to -730 million pounds. Cash burn, however, showed some positive signs, averaging £39 million per week in fiscal Q1. In the second fiscal quarter, cash burn was £38 million.

This level of cash burn is well above the company's expectations of £40 million.

 

Revenue and cash flow

EasyJet's turnover fell by around 90% to £240 million. This fall was due to an 89.4% reduction in passenger numbers (4.1 million) over the period. It is also due to lower capacity, which represents only 14% of the total recorded in the first fiscal quarter of 2019.

In addition, the British low-cost carrier's cash position stood at around £2.9 billion at the end of March. The group will need to use this to deal with the health crisis caused by Covid-19. The airline group also made forecasts for its business in the current quarter, which will close at the end of June.

 

The prospects of the British EasyJet group

The British airline EasyJet will only turn 15% of its potential compared to the same period in 2019 (third quarter which is pre-pandemic). The group had nevertheless tabulated on activities turning at 20% of its capacities. It plans to increase its capacity as early as June.

EasyJet wants to make a total of £500 million in savings for the entire fiscal year. However, the group is still unable to give concrete financial targets for its financial year. It is unable to do so at the moment due to limited visibility and uncertainty.

The airline has the potential to adapt as quickly as possible to the current context in the sector. As a result, it will be able to use more than 90% of its current fleet during the summer period.

Note: This is the only way EasyJet can meet the demand in the sector.