- EasyJet announces narrowed annual loss
- Revenue rebounds sharply as demand returns
- Record headline earnings for fourth quarter
Airline EasyJet (EZJ) failed to impress investors with its full year numbers as the company remained in the red despite a rebound in air travel from the pandemic.
The shares descended 4.4% to 375.9p as the budget carrier announced a narrowed annual loss of £208 million for the 12 months to 30 September, down from a more than £1 billion loss seen in the previous pandemic-affected financial year.
Revenue was up sharply from £1.46 billion to £5.77 billion with EasyJet flying 70 million people in the 2022 financial year compared with 20 million in 2021. The company is performing well during peak periods - with Christmas and October half-term back at pre-pandemic levels. Outside of these dates it is finding it more difficult to fill its planes.
The company also continues to struggle with higher costs, particularly for fuel, and staff shortages which blighted parts of the summer holiday season.
More encouragingly, adjusted headline earnings for the fourth quarter hit a record £674 million with a load factor (the percentage of seats taken up by passengers) of 92%. EasyJet noted early bookings for spring and summer 2023 were ‘positive’ and ancillary income - from things like charges on extra luggage and in-flight refreshments - was up 59% on 2019.
WIZZ AIR AND RYANAIR DOING A ‘BETTER JOB’
Third Bridge analyst Olly Anibaba commented: ‘Wizz Air (WIZZ) and Ryanair (RYA) did a much better job of forward planning last year for this summer’s holidays while EasyJet adopted a wait-and-see mentality.
‘EasyJet is struggling to compete on costs and fares with Wizz Airline and Ryanair. Our experts say that it’s proving difficult for EasyJet to expand in markets where there is already an abundance of capacity, such as Milan.’
Anibaba said that the company is better positioned to compete with legacy carriers in airports where there are capacity constraints. ‘Easyjet’s strength remains in its aggressive cost-saving measures, including greater utilisation of aircrafts and more reliable on-time performance,’ he added.
‘The cost of living crisis is bound to have a significant impact on 2023 summer holiday bookings. Typically families will forgo, reduce, or postpone larger discretionary commitments to protect everyday luxuries.’
