EasyJet has reported a pre-tax loss for the six months to end of March of £701million – in line with expectations – as revenue fell 90% to £240million due to the drop in passenger numbers. Passenger numbers for the reporting decreased by 89.4% to 4.1 million, on the back of an 85% decline in capacity to 6.4 million seats, representing 14% of H1 2019 capacity levels. EasyJet’s passenger load factor decreased by 26.6 percentage points to 63.7% during the H1 2021 period.
The UK low-cost carrier stated that it was “encouraged by the reopening of travel across much of Europe and will maximise opportunities for European flying” and that it maintains significant liquidity while delivery Q2 cash burnslightly better than guidance.
The airline has raised in total during the pandemic liquidity of over £5.5 billion and has access to c.£2.9 billion at the end of the reporting period, comprising cash and cash equivalents plus the undrawn portion of the UKEF facility. The first £300 million tranche of easyJet's borrowings from the CCFF was repaid in March 2021 and the remaining £300 million is due in November 2021. easyJet has no other debt maturities outstanding until the 2023 financial year. EasyJet’s net debt position in £2.0 billion and the airline has retained its investment grade credit ratings. The airline’s cash burn (on a fixed costs plus capex basis) during the first quarter was £39 million per week on average and during the second quarter was £38 million per week, which outperforms previous guidance for £40 million per week given at the Q1 trading update. easyJet confirmed that it paid a further £254 million of customer refunds during the first half of the year.
"With leisure travel taking off in the UK again earlier this week where we are the largest operator to Green list countries and with so many European governments easing restrictions to open up travel again, we are ready to significantly ramp up our flying for the summer with a view to maximising the opportunities we see in Europe,” saidJohan Lundgren, easyJet Chief Executive. “We have the ability to flex up quickly to operate 90% of our current fleet over the peak summer period to match demand.”
During the reporting period, easyJet also booked a £60 million gain as a result of the sale and leaseback of 35 aircraft. The transactions raised £842 million in gross proceeds and added a further c.£90 million to pro forma per annum headline costs. easyJet retains ownership of 55% of the total fleet, with 41% unencumbered.
easyJet's total fleet as at 31 March 2021 comprised 330 aircraft, down from 342 as 30 September 2020, which was driven by the redelivery to lessors of A319 aircraft. The average age of the fleet increased slightly to 8.6 years.
Based on current travel restrictions, easyJet expects to fly c.15% of 2019 capacity levels in the third quarter of this year with an expectation that capacity levels will start to increase from June onwards. easyJet states that it maintains significant flexibility to ramp capacity up or down quickly “depending upon the unwinding of travel restrictions and expected demand, with the flexibility to maximise European opportunities”. The airline notes that this flexibility to ramp up will involve increased variable costs during Q3 as pilots and crew are brought off furlough in readiness for the peak summer season in Q4.