EasyJet said it expects to post narrowed half-year underlying losses of up to £205 million as it insisted cost-cutting actions mean it is “well positioned” to weather a prolonged grounding of aircraft due to coronavirus.
The low-cost airline said it is set to report underlying pre-tax losses of between £185 million and £205 million for the six months to March 31, against losses of £275 million a year earlier.
Chief executive Johan Lundgren said: “Our first-half trading performance was very strong prior to the impact of coronavirus, which shows the strength of easyJet’s business model.
“Since then, I have been immensely proud of our team, right across the business, and the way they have worked through these tough times to put us in the strong position we are in now.
“We took swift action to meet the challenges of the virus.”
Mr Lundgren said in around seven weeks the airline has launched a cost-cutting initiative which has “dramatically brought down our cash burn”, including grounding its entire fleet and deferring the delivery of 24 new Airbus aircraft.
EasyJet said statutory pre-tax losses of up to £380 million are expected due to a hit of as much as £185 million for fuel and foreign exchange hedging costs.
The group’s planes were fully grounded on March 30, but it said more than half of disrupted passengers had chosen vouchers or alternative flights, meaning that bookings for winter are “well ahead” of the previous year.
The airline is likely to initially leave middle seats empty when it resumes flights, to enable passengers to keep their distance from each other.
This is one of the worst crises that aviation has ever seenJohan Lundgren, easyJet
Mr Lundgren said: “I expect that to happen. That is something that we will do because I think that is something that the customers would like to see.
“Then we will work out with the authorities and listen to the customers’ views and points on what they believe is the right thing to do, particularly in the start-up period.”
He criticised recent demands by easyJet’s founder and largest shareholder, Sir Stelios Haji-Ioannou, for the carrier to cancel a £4.5 billion order with Airbus.
Mr Lundgren said: “Clearly it’s not helpful. It’s a distraction on what we’re doing. But myself, the team and the board, we’re absolutely focused on managing through this time.
“This is one of the worst crises that aviation has ever seen.”