26 July 2022

EasyJet takes £133m hit from recent airport chaos

26 July 2022

EasyJet has revealed quarterly losses after taking a £133 million hit from recent airport disruption, but insisted its operations are getting back to normal following cuts to its flight programme.

The budget airline reported a group headline loss before tax of £114 million for the three months to June 30, blaming “widespread operational challenges” and flight cancellations due to staff shortages at airports.

The result marked an improvement on the £318 million loss seen a year ago, but showed it remained in the red despite easyJet’s passenger numbers jumping more than sevenfold to 22 million in the quarter.

EasyJet boss Johan Lundgren said its summer operations had now “normalised” and were “much improved” in July after recent moves by airports to demand a cut in flight programmes.

He said the group had flown around 5,000 flights in the past three days with no cancellations in the UK since the start of the school summer holidays.

The carrier said it remains focused on ensuring “smooth operations this summer” and will continue to “fine tune” its schedule, signalling further flight cuts if needed.

It comes after airports such as Heathrow and Gatwick told airlines to cut their flight schedules following scenes of chaos as staff shortages left them struggling to cope with the sudden ramping up of demand for overseas holidays.

Johan Lundgren and cabin crew at Gatwick Airport (David Parry/PA) (PA Archive)

Holidaymakers have suffered flight delays and cancellations, alongside lengthy queues as airports have struggled with baggage handling, air traffic control and security.

EasyJet said: “The unprecedented ramp up across the aviation industry, coupled with a tight labour market, has resulted in widespread operational challenges culminating in higher levels of cancellations than normal.”

It saw around 5% of its flight schedule cancelled in the quarter as a result.

Mr Lundgren declined to comment on whether the group was pursuing compensation from the airports for recent disruption, but said “that’s clearly something that we’ll be discussing individually with our operators and partners”.

He said it was “meaningless to start pointing fingers” at where the blame lies, saying he believed it was better the airports demanded flights were cut in advance rather than having to take action at the last minute.

He said easyJet was also to blame for not having enough staff on board, especially for the Easter and Queen’s Jubilee getaway.

But Mr Lundgren added: “We have taken action to build the additional resilience needed this summer and the operation has now normalised.

“Despite the loss this quarter due to the short-term disruption issues, the return to flying at scale has demonstrated that the strategic initiatives launched during the pandemic are delivering now and with more to come.”

The group ran 87% of its pre-pandemic flight schedule in its third quarter to June 30 and expects this to edge up to around 90% in its key summer quarter, though this is held back by the airport caps.

It stressed it expects the disruption to be a “one-off this summer”, with schedules and airport operations set to return to normal for next year’s peak season.

But holidaymakers are facing higher ticket prices, with summer fares 13% higher than the pre-pandemic comparable period as it battles to contain costs, which overall soared to £1.9 billion in its third quarter.

Russ Mould, investment director at AJ Bell, said: “Problems like shortage of labour aren’t going to disappear overnight.

“For now though it does look like people have been so starved of their week on the beach they’re prepared to put up with some disruption and higher costs.

“How long that can last when household budgets are under severe pressure is open to question.”

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