EasyJet (OTC:ESYJY) reported a pre-tax loss of £318m in the three months to 30 June, in line with expectations and an improvement on the £346.8m loss in the same period last year.
The group flew 3m passengers during the period with capacity of 4.5m, 17% of 2019 levels. Capacity is forecast to reach 60% of 2019 levels in the next quarter, the bulk of which will be intra-EU flights.
Total cash burn during the quarter was £55m, with fixed costs plus capital expenditure coming in at £34m per week on average, below guidance for £40m.
The shares were broadly flat following the announcement.
Another Disappointing Quarter For easyJet
According to Laura Hoy, Equity Analyst at Hargreaves Lansdown:
“From a profit perspective easyJet’s third quarter was another disappointing one, but considering the ongoing changes to travel restrictions the group’s done well to meet its capacity guidance. Uncertainty around travel restrictions has kept many travellers at home, particularly in the UK. That’s led easyJet (LON:EZJ) to focus on internal EU flights, which it says will make up 60% of its summer traffic.
Management’s doing everything it can to make the most of a fragmented summer travel season. The group’s seen passengers spending more on premium services like additional baggage, something easyJet hopes to capitalise on with a new fare class and bundled seating and bag packages.
But even a best-case scenario this summer doesn’t erase the damage inflicted by the pandemic. The group’s carrying a lot of extra debt and its fleet’s been reduced by 10%. This summer is an important milestone in getting back to the skies, but 2022, when travel has resumed in earnest, will reveal the pandemic’s long-term winners and losers. If easyJet can rebuild on a leaner cost base to capitalise on the travel frenzy it could find itself flying higher than its peers. However, we’ve yet to see if the pandemic’s scars have dented the airline for good”