EasyJet sees softer demand due to Omicron Covid variant
By Frank Prenesti
Date: Tuesday 30 Nov 2021
(Sharecast News) - Budget airline easyJet reported a softening of demand in the first quarter of the current fiscal year due to the outbreak of the new Omicron Covid variant.
The company on Tuesday reported a better-than-expected annual loss and said it expected capacity to return to pre-pandemic levels by the fourth quarter of 2022.
EasyJet posted a headline pre-tax loss of £1.13bn, compared with an £835m loss a year earlier and guidance of £1.14bn - 1.18bn.
"Demand is accelerating with key periods such as October half term, ski and Christmas seeing strong performance. We continue to add capacity and expect to fly around 70% of 2019 capacity in Q2 and expect that Q4 summer capacity will be at near 2019 levels," the company said.
First-quarter capacity was expected to be up to around 65% of 2019 levels, while revenue booked for the second half of the current financial year was ahead of 2019 levels. The airline planned to increase its fleet plan by 25 aircraft to cash in on rising demand.
Airline shares plunged last Friday as news of the new Covid variant emerged from Southern Africa and countries imposed travel bans on six countries from the continent.
Allegra Dawes, airlines sector analyst at research firm Third Bridge said easyJet had benefited from recovering intra-Europe demand, increasing capacity to nearly 60% and noted the airline's ability "to quickly shift capacity to meet demand and place fleets in regions that allow for higher load factors and yields".
"While EasyJet may not have the same low-cost structure as rivals Ryanair and WizzAir, they have effectively managed to rebuild their network and position their fleet in regions with fewer travel restrictions and higher demand," Dawes said, but warned of the the need for greater visibility on booking and management of airport slots as the recovery continued.
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