EasyJet hit by £1.27bn annual loss and Heathrow warns of ‘catastrophic decline’
Low-cost airline plunges into the red for the first time in its 25-year history
EasyJet has posted a £1.27bn pre-tax annual loss, the first in its 25-year history, as the turbulence caused by the coronavirus pandemic continues to shake the aviation industry.
In its financial results for the year ending 30 September 2020, the low-cost airline revealed that capacity decreased by 47.5% and passenger numbers fell by 50% to 48.1 million year-on-year. In 2019 it had recorded profits of £430m and flew 96.1 million passengers.
The second wave of infections and new travel restrictions has “extinguished hopes of a swift recovery”, the Financial Times reports, and the losses “bring down the curtain on a grim earnings season for Europe’s largest airlines”.
EasyJet expects to fly at just 20% of normal capacity into next year, but developments for a Covid-19 vaccine has seen the airline strike a “more upbeat tone”, says Sky News.
With bookings increasing by 50% on Monday, easyJet says underlying demand was strong for air travel, BBC News reports. Chief executive Johan Lundgren believes the recent developments on vaccines “certainly is good news, because we know that is going to be a very critical part of the recovery”.
Lundgren told BBC Radio 4’s Today programme: “I don’t think it’s only about the vaccine, I think it’s also about the fact that we need to have testing in place, we need to have also refined development of the quarantine system.
“We know that people want to travel. On the news of the vaccine last Monday, bookings were up close to 50%, so it just gives evidence to the fact that any good news that comes out of here makes people more confident making bookings going forward.”
Traffic down by 82% at Heathrow
Heathrow has reported an 82% decline in traffic in October, The Independent reports, with Britain’s leading airport describing it as the “eighth consecutive month of catastrophic decline”.
According to its latest travel report the airport warns that due to the current travel ban November is “likely to be even worse” and has accused the government of “leaving the UK’s world class aviation sector out in the cold”.
The report said that “long-haul and critical markets for trade suffered the worst declines due to the government’s debilitating quarantine requirements” and the “lack of a testing regime has left British airports unable to compete with EU rivals”.
John Holland-Kaye, the airport’s chief executive, added: “Aviation is the lifeblood of the UK’s economy, critical for exports of goods and services and imports of vaccines, as well as inbound tourism, students and foreign direct investment.
“Lack of government action is weakening our sector, making it harder for us to support the eventual economic recovery and help deliver the prime minister’s vision of a global Britain.”