EasyJet to make first annual loss in 25-year history

The low-cost carrier predicts a gloomy outlook for 2021 saying it expects to fly around 25% of its planned capacity in the first quarter 

Luton-based easyJet has warned it faces losses of more than £800m for the full financial year, ending September 30, the first annual shortfall in its 25 years of operations. 

In a trading update issued to investors, the firm said it had so far raised £2.4bn in cash since the beginning of the COVID-19 pandemic, and that it remained in a good position to weather the ongoing challenges presented by the virus. 

EasyJet A319
During September, easyJet operates its flight on average at a 76.3% load factor. Aviation Image Network/Simon Gregory

Despite this, Johan Lundgren, the company’s CEO, called on the UK government to come up with tailored arrangements for the industry: “Aviation continues to face the most severe threat in its history and the UK Government urgently needs to step up with a bespoke package of measures to ensure airlines are able to support economic recovery when it comes,” he said. 

The airline’s passenger numbers peaked in August when it flew 4.3 million people, up from the 2.1 million it carried the previous month. However, in September easyJet handled only 2.8 million travellers. The tapering in demand was as a result, the airline says, of changes in government travel guidance and quarantine rules. 

Airbus A319
The airline said it remained "focused on cash generative flying" over the winter season in order to minimise its losses during the first half. Aviation Image Network/Simon Gregory

Despite its expected overall annual loss, easyJet’s group headline shortfall in the fourth quarter is projected to be around £300m, which is lower than the previous three months where the company lost £300m. 

Lundgren added: “Throughout we have taken a very prudent and conservative approach to capacity and this disciplined approach has seen us deliver a better than expected cash burn outcome in Q4 and will see us continue to focus on profitable flying over the winter season in order to minimise losses and cash burn during the first half of 2021.” 

Next year, easyJet said it expects to cover the majority of its pre-existing network with reduced frequency, taking advantage of the European slot waiver mechanism put in place for the winter season.