LONDON: EasyJet’s bookings jumped by 50% last week on positive news about a coronavirus vaccine, a brief respite during a pandemic which pushed the British airline to a 1.27 billion pound ($1.68 billion) annual loss, the first in its history.
European travel has been at very low levels for over eight months, forcing easyJet to take on more debt, tap shareholders for cash and sell dozens of its aircraft to boost its finances to survive until flying recovers.
Chief Executive Johan Lundgren cautioned that while the positive vaccine news was a boost, it was still “early days” and he said he could not forecast when travel would pick-up.
“There is no visibility really beyond the quarter, because this is all down to the travel restrictions,” he told reporters on a call.
That makes him more downbeat than larger competitor Ryanair which forecast a return to 75-80% of pre-crisis traffic by next summer on the vaccine news.
Positive news about the Pfizer vaccine on Nov. 9, which last week sent easyJet shares rocketing by 45%, helped easyJet’s bookings surge 50% last week compared to the previous week said Lundgren, adding that momentum continued this week following news on a Moderna vaccine on Monday.
If travel does not pick up in the coming months, however, investors worry that easyJet could still need to raise extra debt or equity.
The airline said it agreed an extension of a 600 million pound UK government COVID-19 loan on Tuesday, meaning it now has longer to pay back half of the debt, and Lundgren sought to reassure investors that it was well-set for now.
“No, we think we’re in a good position … at this moment in time,” Lundgren said on BBC radio when asked if easyJet would need to raise more money.
He said that the airline would keep its finances under review given the continued uncertainty ahead.
Quarterly cash burn, a gauge watched by investors keen to see costs reduced, improved to 651 million pounds from 774 million pounds in the previous period.
With lockdowns in England, France and Germany, easyJet plans to only fly around 20% of planned capacity for the rest of the year and the CEO said as well as the vaccine, he wanted to see testing as a way to reduce quarantine times to help boost demand.
Shares in the airline traded down 1% to 768 pence at 1008 GMT in a release which Goodbody analysts said contained “no surprises … which can be taken well”.
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