October 19, 2020

Easyjet foresees losses of more than 900 million euros and will not distribute dividends



British company EasyJet hopes to register a recurring pre-tax loss in the range of £ 815 to £ 845 million (from 900 to 930 million euros) for its last fiscal year, which ended on September 30, 2020, weighed down by the effects of the coronavirus pandemic on the business.

Based on advance earnings data (to be officially released on November 17), the company expects the recurring loss in the fourth quarter is less than that registered in the third quarter.

In light of the expected loss, the easyJet board will not recommend the payment of a dividend with respect to this fiscal year And, given the continuing level of uncertainty in the short term, the company does not consider it appropriate to provide any financial guidance for fiscal year 2021.

Based on current travel restrictions in the markets in which it operates, easyJet expects to fly approximately 25% of planned capacity for the first quarter of 2021.

Thus, most of the pre-existing network will be covered with reduced frequencies, taking advantage of the exemption mechanism of franjas european timetables launched for this winter to better match the capacity to the lower demand that currently exists.

“EasyJet entered this crisis in a very strong position thanks to its strong balance sheet and consistent profitability. ANDThis year will be the first in its history in which the company reports losses at the end of the financial year», Said the CEO of the company, Johan lundgren.

50% fewer passengers

The number of airline passengers in 2020 has decreased around 50%, up to 48 million, due to the decrease in a 48% of capacity up to 55 million seats, while the load factor for this year has in turn dropped 4.3 percentage points, standing at 87.2%.

Capacity in the last quarter was 38% of the levels previously planned, having transported 9 million passengers in this period with a 76.3% load factor.

With all of this, the group’s total revenues for the quarter ended September 30 were approximately 620 million poundss (685 million euros).

The company has launched a major restructuring program for reduce costs in all areas of the business. “Eliminating business costs is a key management priority and will position easyJet to emerge from the pandemic in an even more competitive position in the long term,” the company remarked.

As part of this restructuring program, EasyJet launched an employee consultation process on proposals for reduce staffing by up to 30%, including optimizing the network and bases, improving productivity and promoting more efficient ways of working.

As the company has advanced, there will be a charge of around 132 million euros assumed in the second half of 2020 related to restructuring.

Thus, the continuous availability of temporary employment reduction plans in the continental European markets, in addition to the more flexible contracts that were proposed by the unions in the United Kingdom, will save cash during the winter months.

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