28th Jan 2021 10:08
(Alliance News) - easyJet PLC on Thursday said it expects to fly in the current quarter no more than 10% of what it flew in the same period of 2019, as it posted a significant drop in revenue for the quarter just completed.
For the three months ended December 31, easyJet's financial first quarter, the budget airline posted revenue of GBP165 million, down 88% on a year prior. Passenger revenue fell 90% to GBP118 million and ancillary revenue slid by 84% to GBP47 million.
Passenger numbers in the quarter decreased by 87% year-on-year to 2.9 million, in line with a 82% fall in capacity to 4.4 million seats - representing 18% of 2019 financial year capacity levels and in line with expectations that easyJet would fly no more than 20%. Load factor during the quarter was 66%, down from 92% a year before.
"These restrictions and the continued uncertainty regarding their future removal are the main driver of decreased customer demand. Despite this we have successfully maintained our disciplined focus and agile approach on matching capacity to available demand while maintaining high customer satisfaction," easyJet said.
Headline costs, excluding fuel, were reduced by 52% at constant currency as easyJet achieved savings across airport fees, ground handling and crew and maintenance costs. The airline said it estimates that its fixed cost and capital expenditure cash burn in a fully grounded scenario has now fallen to around GBP40 million per week.
Looking ahead, the company said that based on current travel restrictions, it expects to fly in January to March no more than 10% of capacity it did in same period of the 2019 financial year.
On a more positive note, easyJet is anticipating a release of pent-up demand for travel as vaccinations get underway, and retains the flexibility to rapidly ramp-up to capture this, it said.
easyJet also noted that since its level of EU ownership on January 1 was below the required majority to be allowed to fly within the EU - at 47.35% - it has started suspending voting rights to some non-EU shareholders on a 'last in, first out' basis. This means those who bought their share most recently will have the voting rights suspended, while long-term shareholders will retain them.
In December, the airline had updated on its planned contingency plan before the end of the Brexit transition period.
At the time, it noted that under EU rules, carriers which operate inside the trading bloc must be majority owned by shareholders based in the EU, Switzerland, Norway, Iceland or Liechtenstein. It also noted that its current level of ownership by shareholders in the EU and the other four nations was just over 47%, adding that as a result it expected to suspend the voting rights of some non-EU shareholders after the transition period.
"Our performance in the period was in line with management expectations, despite more stringent restrictions coming into place," commented Chief Executive Johan Lundgren. "We have taken the right actions to emerge leaner with a reduced cost base and the retrenchment of legacy carriers at key airports will provide additional opportunities for easyJet."
Shares in easyJet were trading 1.3% lower at 705.00 pence each on Thursday morning in London.
By Ife Taiwo; [email protected]
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