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EasyJet winter losses increase by £250m

EasyJet losses increased by more than £250 million in the winter first half of the year.

The UK budget carrier today reported a headline pre-tax loss of £275 million against £18 million in the same period a year earlier.

Chief executive Johan Lundgren described the performance as being in line with expectations amid “tougher trading conditions”.

The airline is set to make £100 million in cost savings and said full year profit expectations remain unchanged.

However, revenue per seat for the key summer period is expected to be “slightly down”.

The airline said: “This is not helped by the ongoing negative impact of Brexit-related market uncertainty as well as a wider macroeconomic slowdown in Europe.”

Forward bookings for the third quarter are three percentage points behind last year at 72% and flat year-on-year at 34% for the fourth quarter. Capacity growth in the second half is forecast at around 7%.

Capacity growth for 2020 will likely be at the “lower end” of historic rates.

This represents a reduction of the 14.5% growth recorded in the first half of the current financial year, which saw passenger carryings rise by 13.3% to 41.6 million and total revenue up 7.3% to £2.3 billion.

The cost per seat increased by 3.9% to £56.66 as a result of fuel price increases, the impact of foreign exchange, underlying cost inflation, investing in resilience as well as the impact of drones at Gatwick in December, the airline said.

Lundgren said: “EasyJet has performed in line with expectations in the first half.

“I am pleased that despite tougher trading conditions, we flew more than 41 million customers, up 13% on last year, performed well operationally with 54% fewer cancellations in the period and customer satisfaction with our crew is at an all-time high. We have also continued to make good progress on our strategic initiatives in holidays, loyalty, business and with data.

“Cost control remains a major priority for easyJet. Our focus is on efficiency and on innovation through data and we are on track to deliver more than £100 million in cost savings during 2019.

“We are well-equipped to succeed in this more difficult market through a number of short term customer and trading initiatives for the summer; measures to improve our operational resilience; and by focusing on what is most important to customers – value for money, punctuality and great customer service.  All this is underpinned by a market leading balance sheet.

“We have invested in the operation by doubling our standby aircraft and changed our schedules so that even though the external operating environment over the summer is not set to improve, we plan to alleviate the impact on our customers.

“We have rolled out Auto Bag Drop to 17 airports, which combined fly over 34 million of our customers and we are now the number one airline in Berlin and at our newly opened base in Nantes in France. In total we are now the number one airline at 27 airports across the network, up from 18 two years ago.

“Our focus on our customers continues to grow their loyalty. Our loyal customers are choosing us time and again and now account for 76% of total bookings, an increase of seven million since last year.”

 

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