EasyJet posts first annual loss in its history amid pandemic

EasyJet posts first annual loss in its history amid pandemic

EasyJet’s bookings jumped by 50 percent on the day there was positive news about a coronavirus vaccine, a brief respite during a pandemic which pushed the British airline to a $1.68bn (1.27-billion-pound) annual loss, the first in its history.

European travel has been at very low levels for more than eight months and easyJet’s loss for the 12 months to the end of September showed the extent of the pandemic’s effect on the airline.

But chief executive Johan Lundgren said underlying demand for travel was strong.

“We know that down the line people want to travel. Just by the news of the vaccine, you know, last Monday bookings were up close to 50 percent,” he told BBC Radio on Tuesday.

EasyJet’s shares rose 45 percent last week, helped by the vaccine news. Shares in the company were up 1.6 percent to $10.41 (788 pence) at 08:02 GMT on Tuesday in a release which Goodbody analysts said contained “no surprises … which can be taken well”.

The pandemic has crushed easyJet’s finances, forcing it to take on more debt, tap shareholders for extra cash and sell dozens of its aircraft, but Lundgren reassured investors on Tuesday.

“No, we think we’re in a good position … at this moment in time,” Lundgren said when asked if easyJet would need to raise more money.

“But we also said that we’re going to continue to review all the options that are out there to make sure that we can cope with the circumstances and you know there’s still a lot of uncertainty about when the recovery is going to take place.”

EasyJet has repeatedly said it is keeping its liquidity position under review as the outlook for travel has worsened.

It said after talks with the Bank of England and the UK government’s finance ministry, it will extend its borrowing under a COVID Corporate Finance Facility, staggering repayments and relieving pressure on its balance sheet.

Quarterly cash burn, a gauge watched by investors eager to see costs reduced, improved to $860m (651 million pounds) from $984m (774 million pounds) in the previous period.

With lockdowns in England, France and Germany, easyJet is currently flying at approximately 20 percent of planned capacity and said short-term uncertainty was such that it could not provide any financial guidance.