EasyJet Expects to Report Third Straight FY Loss

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EasyJet Expects to Report Third Straight FY Loss
Credit: © Reuters.

By Scott Kanowsky 

Investing.com -- EasyJet (LON: EZJ ) has warned that it expects to post a third straight annual loss despite the budget airline showing "resilience" against external headwinds and summer disruptions.

In a trading update, the U.K.-based carrier said that it will report a full-year group headline pre-tax loss of between £170M and £190M.

Europe's second biggest discount flyer cited the impact of "operational issues" affecting the aviation industry throughout its third quarter ended on June 30, when a surge in post-pandemic passenger demand and labor shortages led to an increase in cancellations. Subsequent disruption costs came in at around £75M, while a recent surge in the value of the U.S. dollar also factored into a one-time expense of £64M.

Factoring in the anticipated loss, easyJet added that its board will not recommend a dividend payment for the fiscal year to September 30, 2022.

However, easyJet said that its operations have still improved significantly, thanks to "management actions" taken to mitigate potential issues. As a result, fourth quarter flight cancellations were below pre-COVID levels.

"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," said chief executive officer Johan Lundgren in a statement.

Looking ahead to the first quarter of its 2023 trading year, easyJet predicted that passenger figures will climb to 20M, rising by more than 30% year-on-year. Load factors - a measure of available seats that have been filled with passengers - are also "currently ahead" of the same point in 2019.

The firm will unveil its complete 2022 results on November 29.

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