19 May 2022
easyJet plc
Results for the six months ending 31 March 2022
easyJet faces summer 2022 with optimism - with customers returning strongly to us whilst also driving a step-changed revenue capability, we expect to deliver attractive continued improvement
- Headline loss before tax of £545 million (Reported loss before tax of £557 million)
- Radical network optimisation: >1.5m seats reallocated to strongest markets
- Step-changed ancillary products delivering incremental revenue
- H2 operating CASK7 ex fuel expected to be close to FY19 levels
- Higher fuel and USD exchange rates layering additional cost in H2
Commenting on the results, Johan Lundgren, easyJet Chief Executive said:
"easyJet has reduced its losses year on year, at the better end of guidance. The pent-up demand and removal of travel restrictions provided for a strong and sustained recovery in trading which has been further boosted as result of our actions. These include the radical reallocation of aircraft which has seen more than 1.5m seats moved to the best performing markets and the step-change in our ancillary products delivering increased revenue - both of which have contributed to our total yield increasing by 9% compared to the same period in FY19. All of this is not only delivering now but with more to come in the future as even more passengers take to the skies.
"We have transformed the airline during the pandemic which has enabled us to emerge with renewed strength, underpinned by a product, network and service that customers really value.
"Since Easter we have been flying up to a quarter of a million customers and 1600 flights every day and in the second half leisure and domestic capacity will be above 2019 levels. It has been well documented that the industry is experiencing some operational issues so, as you would expect, we have been absolutely focused on taking action to ensure we have strengthened our operational resilience for this summer so we can deliver a great, reliable operation to our customers.
"We expect to operate 90% of FY19 capacity in Q3 and we have capacity on sale of around 97% of FY19 flying in Q4 with easyJet holidays now on track to carry over 1.1 million customers this financial year.
"And so, as we return to a more normal summer season, we are ready to capture the increased levels of demand right across our network. We are confident in our plans for summer which will see us reaching near 2019 flying levels and look forward to competing with our renewed strengths as a winner in the post pandemic recovery of European aviation."
Overview
easyJet has continued to allocate aircraft to the markets where we see demand at its strongest. In the second half of the year leisure and domestic routes have fully recovered with capacity at 113% and 104% of FY19 levels respectively, whilst business and city traffic continues to recover with demand currently below FY19 levels. Additionally, the steps we have taken to transform our ancillary offering are delivering significant levels of incremental revenue generation without cannibalising our ticket revenue.
The airline industry has recently been experiencing operational pressures, which mainly impacted easyJet through early April. easyJet has taken action to address these pressures, which includes; proactively managing the schedule, reducing cancellations through various measures such as, boosting recruitment, and improving ID processing. Despite this, bookings continue to be strong as we have seen demand, post the impact of the Omicron variant, returning with the removal of travel restrictions. Booking patterns have remained shorter than they were pre pandemic, however in the last 10 weeks bookings have consistently been above the levels in the same period of 2019. easyJet holidays is continuing to build, as the UK's fastest growing holiday company and remains on track to carry >1.1 million passengers in FY22 with over 70% of the program sold.
Summer 22:
· Forward bookings for the third quarter are 76% sold and 36% sold for the fourth quarter.
· In the last 10 weeks, bookings have been 6% above the same period in 2019
· Easter holidays saw load factors of 90%
· Q4 Sold ticket yields are currently 15% above 2019 and load factors expected to be >90%
· Capacity recovery:
o H2 Leisure capacity at 113% of FY19
o H2 Domestic capacity at 104% of FY19
· Holidays >70% sold and on track to deliver medium term target of £100m+ PBT
Capacity:
· Q3 Capacity expected to be c.90% of FY19
· Q4 Capacity on sale is c.97% of FY19
Hedging
· easyJet is currently c.71% hedged for fuel in H2 of FY22 at c.US$619 per metric tonne, c.49% hedged for H1 FY23 at c.US$701 and c.20% hedged for H2 FY23 at c.US$807. The spot price on 17 May 2022 was around US$1,225.
· Carbon obligation for CY'22 100% covered at €19/MT
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