Watch: EasyJet warns first-ever loss could top $1 bln
The chief executive of easyJet (EZJ.L) has renewed calls for government support for the airline industry, warning the sector faces “the most severe threat in its history”.
EasyJet chief executive Johan Lundgren said the company would make the first loss in its 25-year history this year as a result of the COVID-19 pandemic.
“EasyJet came into this crisis in a very strong position thanks to its strong balance sheet and consistent profitability,” he said. “This year will be the first time in its history that easyJet has ever made a full year loss.”
In a trading update on Thursday, easyJet said it expects to lose up to £845m ($1bn) this year. The airline has been forced to cancel scores of flights and lay off thousands of staff, after the pandemic led to collapsing demand for air travel. Passenger numbers have fallen by 50% over the last 12 months.
Conditions are set to remain tough, with easyJet forecasting it will fly just 25% of its usual capacity over the next few months.
“Aviation continues to face the most severe threat in its history and the UK government urgently needs to step up with a bespoke package of measures to ensure airlines are able to support economic recovery when it comes,” Lundgren said.
Lundgren has repeatedly urged the government to step in and offer tailored support to the UK’s airline sector. Rivals Ryanair (RYA.L) and British Airways (IAG.L) have also been forced to slash thousands of jobs as a result of the crisis.
“The brief respite of higher bookings in August was dashed after fresh quarantine restrictions were imposed on arrivals across Europe,” said Susannah Streeter, a senior investment and markets commentator at stockbroker Hargreaves Lansdown.
“The situation is expected to deteriorate over the winter as infections increase, customers remain fearful of flying and tough quarantine rules are kept in place.”
The government has so far resisted calls to give tailored support to any one sector of the economy, instead urging companies to make use of blanket support measures such as the furlough scheme and COVID support loans.
Shares in easyJet rose 0.3% on Thursday.