EasyJet, the U.K. budget airline, has scaled back plans to ramp up flight capacity this summer as European air travel remains hobbled by government travel restrictions meant to prevent a resurgence in COVID-19 infections.
The airline said it will only fly about 15% of its normal capacity through June—below the 20% projection for the same period it made just last month.
The budget airline is less optimistic compared with some other airlines: IAG, the company that owns British Airways, Spain’s Iberia, and Ireland’s Aer Lingus, said it expects to fly 25% of its normal schedule over the same period, while Air France-KLM said it hopes to hit 50% of normal capacity this summer.
EasyJet said that it expected demand to gradually increase from June onwards. CEO Johan Lundgren said in a statement that the airline had “the ability to flex up quickly to operate 90% of our current fleet over the peak summer period to match demand.”
EasyJet had similar high hopes for a return to summer holiday travel in Europe last year, only to see those hopes dashed by resurgent COVID-19 infection rates that forced governments to bring back restrictions.
Like most airlines, EasyJet’s sales have been pummelled by the pandemic. In the six months since September, the company’s revenues—£240 million($339 million)—were 90% less than in the same period a year earlier. (EasyJet’s fiscal year runs from October through September.)
The company also reported that it had lost £645 million ($910 million) before tax during in the six months through March, almost as much as it lost in all of the previous fiscal year.
Tough year ahead
It’s another set of dismal results on top of what has been a horrible period for the budget carrier, which is Europe’s second largest airline in terms of flights. While 2020 was the worst year on record for the entire industry, EasyJet has also had to contend with a fight with its disgruntled founder, Stelios Haji-Ioannou, who, along with his family, remains the largest single group of shareholders in the airline. It has also had to deal with the fall out from a major hacking incident that was disclosed in May 2020. (Click here to read more about EasyJet’s annus horribilis.)
So EasyJet eventually needs to get customers flying again, or it will be in dire straits. Europe has been easing travel restrictions in recent weeks, but not enough to produce the massive surge in summer bookings airline executives, including Lundgren, had been hoping for. The European Union has said it will allow those who are fully vaccinated to enter Europe, but that individual countries can still maintain stricter rules. And Europe itself continues to lag the U.S. and U.K. in vaccination rates, with just 38.9% of adults receiving at least one jab.
Meanwhile, the U.K., fearful of importing new variants of the coronavirus, is currently discouraging residents from leisure travel to all but a handful of countries, such as Portugal and Gibraltar. Many popular European holiday destinations, including France, Spain, Italy, and Greece remain on the government’s “amber list,” requiring a 10-day period of self-isolation upon return as well as two expensive PCR COVID-19 tests. Airline executives are lobbying the government to expand the “green list” of countries exempt from self-isolation but ministers have said any addition would be made cautiously and that people should not book summer holidays to amber-listed destinations.
That advice puts budget airlines such as EasyJet, which makes about 80% of its revenues from leisure travel, in a bind. “We know there is pent-up demand,” Lundgren said in a statement. “We saw this again when green list countries were released and added more than 105,000 seats.”
But if government restrictions aren’t lifted, passengers won’t book.
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