EasyJet sees softening of bookings as COVID restrictions grow amid Omicron uncertainty

EasyJet has told investors it is expecting passenger numbers to return to pre-pandemic levels next summer despite uncertainty over the winter months ahead as coronavirus restrictions grow across Europe.

The no-frills carrier said it had seen early signs of a softening of bookings amid the emergence of the Omicron variant but it was too early to predict the impact over the important festive season.

EasyJet remained upbeat on the prospects for a recovery ahead while outlining a deterioration in annual losses for the year to 30 September.

Pre-tax losses came in at £1.1bn on an underlying basis compared to £835m in the previous 2019/20 financial year - a period which only reflected six months of COVID-19 disruption.

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It said a focus on priority routes and cost-cutting had limited the impact on its finances - with losses on a statutory basis easing to just above £1bn from £1.3bn.

The company held back on providing full financial guidance for its current year.

It predicted capacity would be around 65% of 2019 levels between October and December because of strong demand for peak winter holidays but it admitted heightened restrictions in key markets - currently driven by a fourth wave of the Delta variant on the continent - had clouded its outlook.

Chief executive Johan Lundgren cautioned: "We remain mindful that many uncertainties remain as we navigate the winter, but we see a unique opportunity for easyJet to win customers and take market share from rivals in this period."

EasyJet's statement added: "We are still seeing good levels of new bookings for the second half and we still expect that the fourth quarter of 2021/22 will see a return to near pre-pandemic levels of capacity as people take their long-awaited summer holidays."

The airline said it was increasing its fleet plan by 25 aircraft, with slots added at Gatwick, Porto, Lisbon and Milan's
Linate.

The company released its results and current passenger projections less than 24 hours after it moved to shore up passenger confidence by extending its policy on allowing customers to change flight plans into 2022.

It was a reaction to a change in travel rules by the government which requires all arrivals into the UK, from this morning until further notice, to take a PCR test on day two and self-isolate until they receive a negative test result.

The uncertainty for travel firms has placed them in the firing line as financial markets ponder what damage the emergence of the Omicron variant may inflict on the global economic recovery.

EasyJet shares - already 28% down in the year to date - fell by 1.2% on the results.

John Moore, senior investment manager at Brewin Dolphin, said of the company's update: "Despite the likely impact of the Omicron variant - at least in the short term - easyJet appears to be optimistic about what lies ahead.

"Having raised equity earlier in the year, the airline is sitting on ample liquidity to see it through oncoming headwinds, while it has also used the pandemic to make a meaningful difference to its cost base and operations.

"Encouragingly, capacity for the summer will be more or less in line with 2019 and the airline is refocussing on higher-contributing bases.

"There is undoubtedly going to be some turbulence ahead, but easyJet has put itself in a good position to navigate its way through those challenges."