EasyJet says its financial performance in the first quarter of its financial year was in line with management expectations "despite increased uncertainty due to the changing environment which saw strengthened travel restrictions across Europe” but expects demand to return strongly when travel restarts.
The airline said passenger numbers in the quarter to 31 December decreased by 87 per cent to 2.9 million in line with an 82 per cent decrease in capacity to 4.4 million seats. Load factor decreased by 26 percentage points to 66 per cent.
Total group revenue for the quarter ending 31 December 2020 decreased by 88 per cent to £165 million.
The airline said the cost-cutting programme it had implemented last year is on track, including a proposal to reduce employee numbers by 30 per cent, and estimates that its fixed cost and capex cash burn in a fully grounded scenario is now around £40 million per week.
In its update, the airline said, “We have successfully maintained our disciplined focus and agile approach on matching capacity to available demand while maintaining high customer satisfaction. Subject to continued progress on vaccinations, together with the future relaxation of government travel restrictions across Europe, we are anticipating a release of pent-up demand for travel.”
The airline believes that the material reduction in capacity by its competitors at its key bases will help it recover strongly when demand does return.
“We retain significant operational flexibility to enable us to capture pent-up demand and are able to ramp up flying quickly when demand returns. We see significant capacity leaving primary airports around Europe as legacy carriers are dramatically scaling back their short haul operations,” the airline said.
“Competition at bases such as Paris, Milan, London Gatwick and Geneva is expected to be very much diminished, with competitors’ aircraft being retired.”
The airline said it had recently obtained further slots at Gatwick, where it is expanding operations, in a trade with Norwegian and will add routes to Aberdeen and Bilbao among others in the summer.