Company Insights

A difficult path awaits EasyJet

  • Multi Asset
  • Industrials
  • Europe

The pandemic’s devastating toll on the airline industry is clear to see – with no company left unscathed. EasyJet plc, one of Europe’s leading low-cost carriers, recently announced USD 1.3bn of pre-tax losses in its full-year results, the first on record, indicative of the extent to which the industry has suffered. However, positive news of progress on vaccine trials in early November sent airline share prices up again – EasyJet included. Against a backdrop of second waves, no-notice travel quarantines and reinstated travel bans, it will be a hard road back to normality while vaccine safety checks and rollouts are completed. Our Interviews with industry specialists have covered what this environment could mean for the company.

As a result of the disruption faced this year, EasyJet announced that it had burned through GBP 774m in April-June and GBP 651m in July-September. Added to this, flying capacity has been reduced to a maximum of 20% for the rest of the year. While there seems to be light at the end of the tunnel, the dire situation for the airline industry looks set to continue. In one of our Interviews, a senior executive at Flybe Group plc told Third Bridge Forum of the market consensus for recovery: “30-40% of capacity [operating] towards the back end of 2020. Then, the longer term, a view [that it’s] going to be 2023, maybe even into 2024, before we get back to 2019 levels of demand.”

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