EasyJet set for first loss in history as CEO cries out for support

Oscar Williams-Grut
·Senior City Correspondent, Yahoo Finance UK
·2 mins read

Watch: EasyJet warns first-ever loss could top $1 bln

The chief executive of easyJet (EZJ.L) has renewed calls for government support for the airline industry, warning the sector faces “the most severe threat in its history”.

EasyJet chief executive Johan Lundgren said the company would make the first loss in its 25-year history this year as a result of the COVID-19 pandemic.

“EasyJet came into this crisis in a very strong position thanks to its strong balance sheet and consistent profitability,” he said. “This year will be the first time in its history that easyJet has ever made a full year loss.”

A large number of easyJet aircrafts are parked on the tarmac of the Geneve Aeroport, in Geneva, Switzerland, Monday, March 30, 2020. EasyJet, a British low-cost airline, on 30 March 2020 said it is ground its entire fleet of more than 300 planes amid ongoing Coronavirus COVID-19 crisis. The new coronavirus causes mild or moderate symptoms for most people, but for some, especially older adults and people with existing health problems, it can cause more severe illness or death. (Salvatore Di Nolfi/Keystone via AP)
EasyJet aircrafts parked at the Geneve Airport, Geneva, Switzerland. Photo: Salvatore Di Nolfi/Keystone via AP

READ MORE: EasyJet blames Greek island quarantines for flight cancellations

In a trading update on Thursday, easyJet said it expects to lose up to £845m ($1bn) this year. The airline has been forced to cancel scores of flights and lay off thousands of staff, after the pandemic led to collapsing demand for air travel. Passenger numbers have fallen by 50% over the last 12 months.

Conditions are set to remain tough, with easyJet forecasting it will fly just 25% of its usual capacity over the next few months.

EasyJet CEO Johan Lundgren talks to media at Gatwick Airport, in Gatwick, Britain June 15, 2020. REUTERS/Peter Cziborra
EasyJet CEO Johan Lundgren. Photo: Peter Cziborra/Reuters

“Aviation continues to face the most severe threat in its history and the UK government urgently needs to step up with a bespoke package of measures to ensure airlines are able to support economic recovery when it comes,” Lundgren said.

Lundgren has repeatedly urged the government to step in and offer tailored support to the UK’s airline sector. Rivals Ryanair (RYA.L) and British Airways (IAG.L) have also been forced to slash thousands of jobs as a result of the crisis.

READ MORE: EasyJet slashes up to 4,500 staff in 'knee-jerk' job cuts

“The brief respite of higher bookings in August was dashed after fresh quarantine restrictions were imposed on arrivals across Europe,” said Susannah Streeter, a senior investment and markets commentator at stockbroker Hargreaves Lansdown.

“The situation is expected to deteriorate over the winter as infections increase, customers remain fearful of flying and tough quarantine rules are kept in place.”

The government has so far resisted calls to give tailored support to any one sector of the economy, instead urging companies to make use of blanket support measures such as the furlough scheme and COVID support loans.

Shares in easyJet rose 0.3% on Thursday.

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