EasyJet to reveal £1bn losses after Covid travel curbs

EasyJet is set to reveal losses hit more than £1 billion last year as Covid wreaked havoc on the travel industry.

The airline group has suffered a turbulent 12 months on the back of fluctuating travel restrictions across Europe, which caused the business to cut flight numbers heavily as holidaymakers stayed in the UK.

Bosses will be looking to reassure investors on Tuesday that plans to ramp up flights will go ahead as it enters the first restriction-free Christmas period in two years.

In a trading update last month the group said pre-tax losses for the 12 months to September are expected to be between £1.13 billion and £1.17 billion, slightly lower than analyst predictions.

Chief executive Johan Lundgren said a surge in demand across Europe and a return of bookings to winter sun destinations like Egypt and Turkey had allowed it to ramp up flight capacity to nearly 60% of pre-pandemic levels.

He said: “October half-term bookings have been strong, particularly to the Canary Islands, where we have increased our capacity to around 140% of full-year 2019 levels.”

But investors will be eager to hear whether plans to increase capacity to 70% of pre-pandemic levels will go ahead as fears rise over a new Covid variant and a return in travel restrictions in the UK.

Russ Mould, investment director at AJ Bell, said the new variant was “the worst possible news for airline operators” as they were starting to see a rebound in demand.

He said: “These companies have been under significant financial stress and will want to avoid having to go back to shareholders yet again to ask for more money to help see them through bad times, should we get new widespread travel restrictions.”

New restrictions will be beyond the control of bosses, but investors will be on tenterhooks for reassuring noises as to how EasyJet could mitigate the impact of further disruption to flights.

The news of a return in restrictions caused shares to slide across the sector.

Shares in easyJet fell by as much 14% at points on Friday, while Wizz Air and British Airways owner International Consolidated Airlines both dropped by around 18% at times.