EasyJet Readies for Tumultuous Summer Amid Slow Reopening
(Bloomberg) -- EasyJet Plc predicted an uneven recovery this summer as European destinations relax coronavirus curbs only gradually, prompting the discount airline to chart a more cautious path to rebuilding its service.
The U.K. company expects to add flights in earnest from June, a month later than planned, it said Thursday after posting a 701 million-pound ($990 million) loss for the first half through March. Uncertainty over travel restrictions will force late changes, hurting booking visibility, while costs are set to rise as pilots return from furlough.
European airlines are trying to gauge how quickly they can bring back flights as governments move toward relaxing their borders while guarding against a surge in infection rates. London-based EasyJet said it’s frustrated over the approach being taken by Britain, where only 12 locations are on a so-called green list that still requires travelers to take costly tests, and Prime Minister Boris Johnson has urged people not to fly to “amber” nations.
“The government here in the U.K. are almost dismantling the framework they set up themselves,” Chief Executive Officer Johan Lundgren said on Bloomberg Television. “We’re now in a situation where green doesn’t mean green, because there are still lots of restrictions, and amber almost means red.”
Shares of EasyJet traded 2.5% lower at 958.40 pence as of 10:07 a.m. in London.
Lundgren said telling people not to visit places like Greece and Spain despite an amber status that permits travel while requiring self-isolation on return is “very confusing” and risks demonizing tourists. EasyJet will continue to provide flights to such countries despite Johnson’s guidance on the traffic-light system, which was introduced on Monday.
Europe’s second-biggest low-cost airline is offering just 15% of its pre-virus capacity in the current quarter, compared with prior plans to deploy 20%. Still, Lundgren said he’s encouraged that progress is being made after the European Union advanced its plans for a reopening.
The European Parliament may reach agreement as early as this week on allowing quarantine-free travel within the bloc from June, while EU governments on Wednesday agreed to permit entry from third countries that are deemed safe, and for vaccinated tourists.
“It’s fair to say we’re definitely now in the phase of recovery,” said Lundgren. “We’re ready to pick up the demand that is going to come across the market.”
EasyJet’s loss was within a previously guided range of 690 million pounds to 730 million pounds. Revenue fell to 240 million pounds compared with an estimate of 235 million pounds. Continued short-term uncertainty makes it impossible to provide further financial guidance, it said.
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