The latest quarterly trading update from low-cost carrier EasyJet (EZJ) revealed the extent of the difficulties associated with the pandemic travel restrictions.
Revenues for the group for the three months to 30 June of £212.9 million marked a large increase from the £7.2 million figure recorded in the same period a year earlier when the airline sector ground to a halt as the pandemic unfolded.
However, a pre-tax loss of £318.3 million was accompanied by the news that cash burn for the quarter was £55 million. That shows EasyJet is still in a difficult place despite flying activity starting to recover.
‘The worst thing that could happen to EasyJet now is another wave of Covid infections causing governments in Europe to impose new lockdown measures,’ says Russ Mould, investment director at AJ Bell.
‘It’s summertime and the airline industry is meant to be at that point where bookings take off, and so do more planes. A lot can change in the next six to eight weeks, but every day counts for an industry that is still losing a lot of money.’
Two thirds of EasyJet’s summer bookings are now coming from Europe compared with the historical 50:50 UK: European split.
As part of this change in geographic focus, the carrier has switched eight routes destined for Greece to take off from its EU and Swiss bases rather than the UK.
After peaking at £10.95 in early May, the share price has since fallen by 28%. The shares are trading up 4% at 799p in response to the latest update.
