Easyjet back in the black as customers forgo clothes and meals out for holidays
EASYJET will soar back to profits this year as holiday makers prioritise summer sun over almost all other purchases outside of household bills.
Research by the budget airline shows that travel is regarded as more important for Brits still getting over the effects of the pandemic than takeaways, meals out or clothes.
Easyjet ran up losses of around £2 billion in the Covid affected years but, a rights issue of £1.2 billion helped it get through.
Now chief executive Johan Lundgren insists the business is back on the front foot. He is opening a new aircraft base at Birmingham Airport, the first such opening since lockdown.
Lundgren said: “easyJet’s optimised network combined with the strong demand seen for flights and holidays, enhanced revenue capabilities and operational resilience, means we enter the summer with confidence.”
The holiday arm will make full-year profits of £80 million. It will move into the Swiss market this summer as part of a wider European expansion.
Analysts say the CEO has more to do. Emma Carr at Gowling WLG, said:
"easyJet is currently navigating through economic turbulence, and despite introducing new cost control measures and adding additional routes to its offering, more is needed to strengthen its margins. Lundgren needs to focus on decarbonising the airline’s fleet ahead of the net zero 2050 target, something which the sector as a whole is falling behind on compared to others.”
In the six months to March the company made another loss, this time of £411 million. Sales rose from £1.5 billion to £2.7 billion.
Sophie Lund-Yates at Hargreaves Lansdown said: “easyJet is enjoying the spoils that come with a Covid-restriction-free summer. Trips abroad are so important to the group’s core customers, easyJet’s been able to pump up its ticket prices and passengers are still pouring on board.”
The new Birmingham base will create around 100 direct jobs for pilots and crew, and supporting around 1,200 jobs in total.
EasyJet already operates flights to and from the airport, which recent analysis found was the worst in the UK for delays to departing flights in 2021 and 2022.