REG - easyJet PLC - Q1 Trading Statement

easyJetAnnouncement

27/01/2022 07:00

For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20220127:nRSa7724Za&default-theme=true

RNS Number : 7724Z  easyJet PLC  27 January 2022

27 January 2022

 

easyJet plc

Trading statement for the quarter ended 31 December 2021

 

·    Q1 loss almost halved year on year alongside significantly reduced
operating cash burn

·    Omicron impacting bookings in the short term

·    Increased bookings seen post UK Government decision to remove all
travel testing requirements

·    Q4'22 on sale capacity unchanged, remaining at near 2019 levels

·    Ancillary transformation continuing to deliver higher returns

 

Summary

easyJet's first quarter financial performance was in line with management
expectations despite the changing environment which saw increased travel
restrictions at the end of the quarter in response to the Omicron variant.
October and November saw improved performance as load factors continued to
strengthen, with both months above 80%. Omicron paused this momentum which
resulted in load factors declining during December. easyJet expects that
Omicron will continue to have an impact over short term performance in Q2.

 

Following the UK Government's announcement on 5 January to remove pre
departure testing, easyJet has seen a sustained step change improvement in
booking volumes. On 24 January, easyJet welcomed the news that the UK will see
restriction free travel from 11 February which has provided a further boost to
bookings which we expect will continue to have a positive impact on sales
going forward. Since 5 January, other countries, including France, have
subsequently followed suit by relaxing restrictions, which is a welcome step
closer towards restriction free travel across the whole of Europe.

 

Q4 on sale capacity is at near 2019 levels, with easyJet's leisure flows
expected to see strong demand this summer, in line with previous expectations.
While customers continue to book closer to departure and visibility remains
limited, booked ticket yield to date remains encouraging for Easter (which
falls within Q3) as well as into the Q4 summer period. easyJet holidays also
continues to strengthen its position as a significant player in the holidays
market, with over 50% of the programme sold and stronger margins compared to
2019.

 

Commenting, Johan Lundgren, easyJet Chief Executive said:

"easyJet produced a significant year on year improvement in the first quarter,
despite the short-term impact of Omicron in December, halving losses and cash
burn compared with Q1 21 alongside driving higher returns from ancillaries.

"During the pandemic, easyJet has transformed many areas of the business
including optimising its network and flexibility and finding sustainable cost
savings. This is helping partially offset inflationary pressure, while also
step-changing ancillary revenue, which is delivering for us now.

"Booking volumes jumped in the UK following the welcome reduction of travel
restrictions announced on 5 January, which have been sustained and then given
a further boost from the UK Government's decision earlier this week to remove
all testing requirements. We believe testing for travel across our network
should soon become a thing of the past.

"We see a strong summer ahead, with pent up demand that will see easyJet
returning to near 2019 levels of capacity with UK beach and leisure routes
performing particularly well.

"We remain confident that easyJet will continue to win customers and are
excited about our plans for the summer as we identify further opportunities at
our key bases which, alongside our step-changed ancillary offering, will
deliver strong, sustainable shareholder returns."

Capacity

During Q1 easyJet flew 64% of FY'19 capacity which was broadly in line with
the guidance provided and a significant increase on the same period last year
where easyJet flew 18% of FY'19 capacity.

 

Load factor was 77%, rather than over 80% as guided, due to the impact that
Omicron had on customers' confidence and ability to travel during December.
easyJet saw significant levels of late flight transfers out of December due to
travel restrictions and concerns over Omicron. These customers have used our
customer friendly policies to re-book easyJet flights which will have a
positive impact on load factors, revenue and customer retention in future
periods.

 

Passenger(1) numbers in the quarter increased to 11.9 million (Q1 FY'21: 2.9
million).

 

                            October  November 2021  December 2021  Q1      Q1

                            2021                                   FY'22   FY'21
 Number of flights          32,603   22,769         30,246         85,618  23,428
 Peak operating aircraft    251      213            222            251     152

 Passengers (thousand) (1)  4,861    3,347          3,683          11,891  2,858

 Seats flown (thousand)     5,868    4,131          5,472          15,471  4,350
 % of FY'19 capacity flown  62%      60%            71%            64%     18%

 Load factor (3)            83%      81%            67%            77%     66%

 

Financials

Total group revenue for the quarter ending 31 December 2021 increased to £805
million (Q1 FY'21: £165 million). Passenger revenue increased to £547
million (Q1 FY'21: £118 million) and ancillary revenue increased to £258
million (Q1 FY'21: £47 million) primarily as a result of the increase in
capacity flown. Ancillary revenue per seat of £14.84 (Q1'21: £10.20)
continues to benefit from our cabin bags and new leisure fare bundle
delivering incremental income. Underlying ancillary revenue per booked
passenger remains strong despite winter seasonality and the impact of reduced
ski travel in December due to Omicron.

 

Group headline costs for the quarter ending 31 December 2021 were £1,018
million (Q1 FY'21: £588 million), primarily driven by the higher level of
capacity flown compared to the same period last year. Due to the impact of
Omicron, an increased number of standby crew is being held to proactively
protect the operation and minimise any impact on our customers from higher
crew absence levels. easyJet was the most punctual large European airline in
2021, with the best OTP(4), which has continued into Q1 FY'22. Following a
successful recruitment process and preparation for our summer ramp up, easyJet
will welcome new crew into the business during Q2 to undertake their
training.

 

Headline loss before tax for the quarter ending 31 December 2021 was £213
million, a £210 million improvement compared to the £423 million loss in Q1
FY'21. Included in the Headline loss was a £15 million gain from balance
sheet FX revaluations.

 

Cash burn during the first quarter (seasonally the weakest quarter for working
capital) was £450 million (Q1 FY'21: £969 million). This improved
performance is despite the removal of furlough across most of Europe and
includes delivery payments, as easyJet took delivery of four new aircraft
during the period.

 

During the first quarter easyJet repaid £300 million of commercial paper,
clearing the final balance under the CCFF scheme. easyJet has no other debt
maturities until the 2023 financial year. As at 31 December 2021 our net debt
position was c.£1.2 billion (30 September 2021: £0.9 billion) including cash
and cash equivalents and money market deposits of c.£2.9 billion.

 

Sustainability

In December, easyJet received a B rating from CDP for 2021, an improvement on
the previous year. During COP26, easyJet signed up to Race to Zero, the
UN-backed campaign to drive net zero CO2 emissions by mid-century, and we are
working on our science-based carbon reduction target and Net Zero transition
roadmap to 2050. Meanwhile, we continue to be the only major airline in Europe
to offset all carbon emissions associated with our flights and easyJet
holidays, and are committed to taking action now, and lead the way to
decarbonise aviation.

 

easyJet continues to pioneer innovation to shape a sustainable future for
travel, demonstrated by the recently announced partnerships with Cranfield
Aerospace Solutions (CAeS), to support the development of its hydrogen
propulsion system for commercial aircraft, as well as our collaboration with
Rolls-Royce focusing on alternative energy and power solutions, including low
carbon and zero-emission technologies, and their application for aircraft.

 

Outlook

easyJet currently has c.67% of Q2'19 capacity on sale. In January, capacity
will be c.50% of 2019 levels, which will ramp up as we move through the
quarter. Q4 FY'22 capacity on sale remains at near Q4'19 capacity levels.

 

easyJet is currently c.60% hedged for fuel in the financial year ending on 30
September 2022 at c.US$504 per metric tonne with the spot price as at 26
January 2022 being US$840.

 

For further details please contact easyJet plc:

Institutional investors and analysts:

Michael Barker                  Investor
Relations                           +44 (0) 7985 890
939

Adrian Talbot                     Investor
Relations                           +44 (0) 7971 592
373

 

Media:

Anna Knowles                   Corporate Communications
         +44 (0) 7985 873 313

Edward Simpkins              Finsbury
 
+44 (0) 7947 740 551 / (0) 207 251 3801

Dorothy Burwell               Finsbury
 
+44 (0) 7733 294 930 / (0) 207 251 3801

 

A copy of this Trading Statement is available at
http://corporate.easyjet.com/investors
(http://corporate.easyjet.com/investors)

 

Notes

1.      Represents the number of earned seats flown. Earned seats
include seats that are flown whether or not the passenger turns up as easyJet
is a no-refund airline, and once a flight has departed a no-show customer is
generally not entitled to change flights or seek a refund. Earned seats also
include seats provided for promotional purposes and to staff for business
travel.

2.      Capacity based on actual number of seats flown.

3.      Represents the number of passengers as a proportion of the
number of seats available for passengers. No weighting of the load factor is
carried out to recognise the effect of varying flight (or "sector") lengths.

4.      Based on OAG Reported data

 

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
 or visit
www.rns.com (http://www.rns.com/)
.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
.   END  TSTUNARRUSUAUUR