EasyJet warns of heavy losses and continuing flight cuts

Image copyright
Reuters

EasyJet has warned it faces losses of more than £800m this year and that it expects to fly at just 25% of normal capacity into next year.

Although the airline said in a trading update it had taken tough action to cut costs, the warning underlines the continuing challenges for the industry.

Sky News has reported that EasyJet has signalled to the government that it may need more financial support.

There was no reference about needing state aid in the trading statement.

However, chief executive Johan Lundgren said: “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.”

The airline said it expected to sink into a pre-tax loss of between £815m and £845m in the current financial year, which is worse than analysts’ forecasts of a £794m loss. It would be the first time in EasyJet’s 25-year history it has not made an annual profit.

The carrier has already taken a £600m loan from the government, cut 4,500 jobs, raised £608m from selling aircraft and tapped shareholders for £419m.

EasyJet’s statement said it would “continue to review its liquidity position on a regular basis and will continue to assess further funding opportunities, including sale and lease backs, should the need arise”.

The airline will formally report its annual results on 17 November.