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Low-cost airline easyJet PLC on Thursday said it will post a narrowed annual loss, amid currency movements and flight cancellations, though its easyJet Holidays division generated £35 million profit.
easyJet expects to report a headline pretax loss in the range of £170 million to £190 million for its financial year that ended September 30, narrowed from a pretax loss of £1.14 billion the year prior.
However, easyJet holidays generated a pretax profit of over £35 million. In its financial year 2021 report, the company had said it saw ‘a clear roadmap to easyJet holidays contributing annual profit before tax in excess of £100 million.’
easyJet explained that the loss in the recent year includes a £64 million FX loss from balance sheet revaluations and incremental disruption costs of £75 million, mainly from operational issues experienced across the industry in its third quarter.
It added that the impact of the Omicron variant of Covid-19, the Russia-Ukraine conflict, and industry-wide issues experienced this summer affected operational performance.
In line with its dividend policy and considering the expected result, easyJet said its board will not be recommending the payment of a dividend for the recent financial year.
Further, easyJet said that for the fourth quarter alone, it expects headline earnings before interest and tax to be between £525 million and £545 million.
During its fourth quarter, it flew around 26.3 million seats, up from 17.3 million from the same period in financial year 2021. easyJet added that this is also 88% of financial year 2019 capacity.
The company explained that actions taken improved operational performance from the beginning of July with on-the-day cancellations in quarter four below the same period in financial year 2019.
Looking ahead to the first quarter of financial year 2023, easyJet expects to fly around 20 million seats, up more than 30% year on year. It added that load factors are currently ahead of the same point in financial year 2019.
Chief Executive Johan Lundgren said: ‘easyJet is Europe's largest operator at primary airports with one of the strongest balance sheets in the aviation industry. We face the uncertain macro-economic environment with many strengths through our brand, network and business model which enable us to provide low fares to millions despite the rising cost of living.’
easyJet plans to publish its full-year results for the year ended September 30 on November 29.
Shares in easyJet were down 1.0% to 282.60 pence each in London on Thursday morning.
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