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RNS Number : 7225O
easyJet PLC
12 October 2021
12 October 2021
easyJet plc
('easyJet')
easyJet Trading Update for the year ended 30 September 2021
easyJet sharply improves YoY headline loss in the quarter with a
positive operating cash flow and forward booking momentum
- Q4 headline losses decreased by more than half YoY with positive operating cash generated
- Headline loss before tax for the year ended 30 September 2021
is expected to be between GBP1,135 million and GBP1,175 million
compared to consensus of GBP1,175 million.
- easyJet sees positive momentum carried into FY22 with H1
bookings double those of the same time last year.
Summary
During its fourth quarter easyJet flew 17.3 million seats,
operating 58% of FY19 capacity with a stronger performance on
intra-European and UK domestic routes, whilst demand for
international routes from the UK continued to be impacted by UK
Government travel restrictions.
easyJet has maintained its disciplined approach to capacity and
cash management which resulted in the generation of c.GBP40 million
of operating cash during Q4. Net debt has reduced to c.GBP0.9
billion from GBP2.0bn at Q3, following the successful GBP1.2
billion rights issue, of which GBP90 million was received after 30
September 2021, coupled with Q4 operating cash generation. The
capital raise also provides the airline with a solid platform for
growth.
Capacity is now expected to be up to 70% of 2019 levels in Q1.
While intra-European demand led the recovery over the summer, the
recent UK Government announcement to remove and relax restrictions
and testing has created positive booking momentum into Q1. In
response, the airline has added 100,000 seats for Q1, with
particularly strong demand for winter sun destinations. easyJet
expects capacity to continue to grow throughout FY22 and we will
take quick and decisive action to capture additional opportunities
alongside planned organic growth.
Johan Lundgren, CEO of easyJet, said:
"During the quarter easyJet significantly ramped up its flying
which meant we were the second largest airline operating in Europe
this summer while also halving our Q4 losses versus last year. We
are encouraged to see positive booking momentum into FY22 which has
led us to increase our capacity plans for Q1 to fly up to 70% of
2019 levels.
"It is clear recovery is underway. Business travel is returning
to easyJet with corporates and SMEs attracted by our value, network
and approach to sustainability. We have seen city breaks beginning
to return alongside growing demand for leisure travel from
customers looking for flights and holidays to popular winter sun
destinations including Egypt and Turkey. October half term bookings
have been strong, particularly to the Canary Islands where we have
increased our capacity to c.140% of FY19 levels.
"Having successfully completed our rights issue and strengthened
the balance sheet, we will take advantage of strategic investment
and growth opportunities to deliver strong shareholder value."
Revenue, Cost and Cash burn
Total group revenue and headline costs for the fourth quarter is
expected to be around GBP1,000 million and around GBP1,140 million
respectively. easyJet's continued focus on cost has delivered
c.GBP510 million of savings in FY21, of which almost half will be
sustainable. The sustainable benefits will help partially mitigate
inflationary pressures and cost headwinds in ownership costs and
navigation charges. easyJet is c.55% hedged for fuel in the
financial year ending on 30 September 2022 at c.US$500 per metric
tonne with the spot price as at 11 October 2021 being US$760.
Our disciplined approach has resulted in c.GBP40 million of
positive operating cash generation during the fourth quarter. Cash
burn on a fixed costs plus capex basis during the quarter was
c.GBP36 million per week on average, coming in under the guidance
of GBP40 million per week.
Capacity
During Q4 easyJet flew 58% of FY19 capacity, a significant ramp
up from the 17% of FY19 volumes which easyJet flew in Q3. In Q4,
domestic traffic in UK and intra-European flying was 77% of FY19
levels, whereas UK International travel was just 32% of FY19
levels.
Continental European load factors were 83.0%, in the quarter,
which accounted for 62% of capacity. In comparison, UK
international travel was significantly impacted by the UK
governments onerous and expensive travel restrictions, resulting in
load factors of 63.2%.
July August 2021 September Q4 FY
2021
2021 2021 2021
Number of flights 27,704 36,043 32,135 95,882 155,664
------- ------------ ---------- ------- --------
Peak operating aircraft 225 259 259 259 259
------- ------------ ---------- ------- --------
Passengers (thousand)
(1) 3,690 5,126 4,538 13,354 20,425
------- ------------ ---------- ------- --------
Seats flown (thousand) 4,989 6,503 5,778 17,270 28,177
------- ------------ ---------- ------- --------
Load factor (3) 74.0 78.8 78.5 77.3 72.5%
------- ------------ ---------- ------- --------
We have delivered dynamic schedule updates, with a two to
four-week lead time, to capitalise on all available demand. Given
the current competitive landscape, yield continues to remain under
pressure.
Liquidity
As at 30 September 2021 easyJet has unrestricted access to
c.GBP4.4 billion of liquidity. The next debt maturity is GBP300
million of commercial paper, issued under the CCFF scheme, which is
due to be repaid in November 2021. easyJet has no other debt
maturities until the 2023 financial year.
As at 30 September 2021 our net debt position was c.GBP0.9
billion (30 September 2020: GBP1.1 billion) including cash and cash
equivalents of c.GBP3.5 billion. Due to the proximity of the rights
issue completion to the year end, c.GBP90 million was receivable at
30 September 2021. This has been fully received during the first
week of October.
Rights issue
On 28 September easyJet successfully completed the 31 for 47
rights issue. This capital raise strengthened easyJet's balance
sheet and accelerates its post--COVID 19 recovery plan. This allows
easyJet to emerge from the pandemic with renewed strength,
positioned as a structural winner in this rapidly evolving
sector.
The Company will provide an update on the level of EU ownership
following the completion of the rights issue as part of the Full
Year results.
Outlook
easyJet expects to report a group headline loss before tax in
the range of GBP1,135 million and GBP1,175 million for the
financial year 2021. A non-headline gain of around GBP90 million is
expected to be recognised in the financial year 2021.
In line with easyJet's dividend policy and considering the
expected loss, the board will not be recommending the payment of a
dividend in respect of the year to 30 September 2021. Full results
for the year ended 30 September 2021 will be reported on 30
November 2021.
Based on current travel restrictions in the markets in which we
operate, easyJet expects to fly up to 70% of FY19 planned capacity
for Q1 FY22. Visibility remains limited as customers continue to
book closer to their travel date.
At this stage, given this continued level of short-term
uncertainty, it would not be appropriate to provide any financial
guidance for the 2022 financial year.
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
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. The 308 Fleet number excludes 12 aircraft at 30 September
2021 which are in storage and on a zero-rent operating lease and
only incur rental if flown.
5. All numbers in this statement are provisional and are subject
to audit.
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October 12, 2021 02:00 ET (06:00 GMT)
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