EasyJet records first massive loss in 25-years operating history
EasyJet, a British low-cost airline, suffered the first loss in its 25-years of operating history. The airline reported a significant pre-tax loss of €1.4 billion.
On November 17, 2020, the British low-cost airline stated that due to the COVID-19 air travel restrictions, its pre-tax loss reached €1.4 billion for the year to September 30, 2020. In comparison, the air carrier made a profit of €479 million in the same period of 2019. The airline also announced that the number of passengers dropped by 50% to 48.1 million, while it flew a total of 96.1 million travelers in 2019.
In order to withstand a hit of the COVID-19 pandemic, the airline reduced the number of its employees by cutting 4,500 jobs. EasyJet also raised up to €1.1 billion from aircraft sale and leaseback deals as well as received a €669 million loan from the government of the UK, the financial report showed. The whole airline’s fleet grounding to a period between March and June 2020, also had a huge impact on the losses incurred.
"While we expect to fly no more than 20% of planned capacity for Q1 2021, maintaining our disciplined approach to cash generative flying over the winter, we retain the flexibility to rapidly ramp up when demand returns“, said Johan Lundgren, the Chief Executive of EasyJet in a statement.
Despite suffering the first loss in its 25-years of operations, EasyJet announced that its liquidity stayed stable and called itself "strongly positioned to be a leader in the recovery of the European airline industry“.
"We know our customers want to fly with us and underlying demand is strong, as evidenced by the 900% increase in sales in the days following the lifting of quarantine for the Canary Islands in October. We responded with agility adding 180,000 seats within 24 hours to harness the demand. And last week we saw the welcome news about a possible imminent vaccine roll out“, added the CEO of EasyJet.
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