Home UK News COVID-19 pandemic hands EasyJet its first ever annual loss of £1.27bn

COVID-19 pandemic hands EasyJet its first ever annual loss of £1.27bn

EasyJet reports a surge in bookings on the back of positive vaccine coronavirus developments after a disastrous 2019-20

EasyJet has revealed its first annual loss in its 25-year history as a company of £1.27bn, a result of the coronavirus crisis turbulence that has grounded airline companies globally.

The no-frills carrier has said that the total loss before tax figure for the year to the end of September 2020 compared to profits of £430m in the previous 12.

Chief executive of EasyJet, Johan Lundgren, says bookings have shot up in recent weeks.

This comes after Rishi Sunak is currently looking into plans to charge motorists in the UK for every mile that they drive on Britain’s roads, in order to fill the £40billion tax gap left as more people make the switch to electric cars, according to recent reports.

However, it struck a more upbeat tone at the announcement on Tuesday following a slew of downbeat statements during 2020 amid the COVID-19 pandemic, the latest just 11 days ago that it expected to be operating only 20% of services during this year’s Christmas quarter.

EasyJet has said that it had received a 50% leap in its bookings following positive vaccine developments for COVID-19 last week when the pharmaceutical company Pfizer, revealed that its candidate had been found to be over 90% effective within its stage three trials.

Johan Lundgren, the Chief executive of EasyJet told his investors that the momentum had been maintained and said that he did not expect the airline to seek further liquidity, having raised over £3bn following a cash burn of over £1.4bn during April to September on their own.

Mr Lundgren said: “While we expect to fly no more than 20% of planned capacity for the first quarter of 2021, maintaining our disciplined approach to cash generative flying over the winter, we retain the flexibility to rapidly ramp up when demand returns.”

COVID-19 crisis forces easyJet to first ever annual loss of £1.27bn
Johan Lundgren, the Chief executive of EasyJet

“We know our customers want to fly with us and underlying demand is strong.”

This comes after a report that had been commissioned by the Chancellor of the Exchequer, Rishi Sunak, has said that the Treasury could potentially raise £14bn by increasing the country’s capital gains tax rates in order to bring them in line with the UK’s income tax.

Dan Thomas, senior analyst at Third Bridge, said it reflected a clouded outlook for the company, saying: “Potential vaccines don’t change the near term demand picture for carriers like easyJet.

“For the time being, this winter looks bleak for easyJet as national lockdowns persist across the continent.”

He added: “When travel corridors do begin to reopen, profitability is likely to remain depressed as multiple carriers look to redeploy across a smaller number of potential routes and discount fares are offered.”

Eve Cooper
Eve Cooper
I've been writing articles and stories for as long as I can remember and in the past few years I've had the fortune of turning that love & passion for writing into my job 🙂

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