TIDMEZJ
RNS Number : 6771T
easyJet PLC
26 July 2022
26 July 2022
easyJet plc
Trading statement for the three months ended 30 June 2022
easyJet's key areas of transformation continue to deliver, with
Q3 financial performance improved despite costs from industry wide
operational issues
-- Q3 group headline loss before tax of GBP114m, included:
o GBP133m cost impact from disruption
o GBP36m loss from FX balance sheet revaluations
-- Q3 headline EBITDAR profit of GBP103m (Q3 FY19: GBP313m)
-- easyJet's transformation continues to deliver
o Network optimisation driving positive demand with Q4 load
factors booked slightly ahead of FY19
o Step-changed ancillaries continuing to deliver with Q3
ancillary yield 55% above FY19
o easyJet holidays generated GBP16m profit in the quarter
-- easyJet is currently c.83% hedged for fuel in Q4 at c.US$705 per metric tonne
Summary
In Q3 easyJet flew 22m passengers(1) , more than seven times
higher than the same period last year, representing 87% of FY19
capacity. Load factors continued to build over the quarter,
reaching highs of 92% in June. The unprecedented ramp up across the
aviation industry, coupled with a tight labour market, has resulted
in widespread operational challenges culminating in higher levels
of cancellations than normal. Despite this, easyJet operated 95% of
its planned schedule in Q3.
A ction taken to remove capacity and build resilience into Q4,
due to caps imposed by London Gatwick and Amsterdam Schiphol
alongside wider challenges within Europe has resulted in July
operations to date being much improved. easyJet remains focused on
ensuring smooth operations this summer and will continue to fine
tune our schedule if required.
Airline ancillary yield per passenger of GBP22.07 continues to
outperform pre pandemic levels, up 55% on the same period in 2019.
easyJet holidays generated GBP16m of profit in the quarter as it
carried 0.4 million customers, passing its previous highest profit
of GBP10m(4) in a full year. The holidays business remains on track
to carry 1.1m passengers in the full year.
Bookings have built through the quarter as demand for easyJet's
leading network remains solid. Q4 is currently 71% booked, load
factor slightly ahead of 2019 and sold ticket yield is 13% above
FY19.
easyJet is seeing yields track positively through the first half
of FY23, with October half-term currently booked in line with FY19
on capacity at 95% of FY19 levels.
Commenting, Johan Lundgren, easyJet Chief Executive said:
"Delivering for customers this summer remains our highest
priority. During the quarter we carried seven times more customers
than the same time last year and operated 95% of our schedule. We
have taken action to build the additional resilience needed this
summer and the operation has now normalised.
"Despite the loss this quarter due to the short-term disruption
issues, the return to flying at scale has demonstrated that the
strategic initiatives launched during the pandemic are delivering
now and with more to come. This includes a step-change in ancillary
yields, increasing 55% versus the same period in 2019, and a record
profit of GBP16m generated in the quarter by easyJet holidays which
is on track to serve 1.1 million customers in the full year.
"easyJet expects capacity to be c.90% of Q419 across our network
of major European airports, with load factors targeted above
90%."
Capacity
During Q3 easyJet flew 87% of FY19 capacity(2) , in line with
the guidance and a significant increase on the same period last
year where easyJet flew 16% of FY19 capacity. Load factor was 88%,
as guided, due to increasing customer demand post travel
restrictions easing.
Passenger(1) numbers in the quarter increased to 22.0 million
(Q3 FY21: 3.0 million).
April May June Q3 Q3
2022 2022 2022 FY22 FY21
Number of flights 44,917 48,335 46,793 140,045 24,682
------- ------- ------- -------- -------
Passengers (thousand)(1) 6,932 7,424 7,645 22,001 2,985
------- ------- ------- -------- -------
Seats flown (thousand) 8,034 8,596 8,306 24,936 4,495
------- ------- ------- -------- -------
% of FY19 capacity
flown 86% 88% 86% 87% 16%
------- ------- ------- -------- -------
Load factor (3) 86% 86% 92% 88% 66%
------- ------- ------- -------- -------
Financials
Total group revenue for the quarter ending 30 June 2022
increased to GBP1,755 million (Q3 FY21: GBP213 million). Passenger
revenue increased to GBP1,152 million (Q3 FY21: GBP152 million) and
ancillary revenue increased to GBP603 million (Q3 FY21: GBP61
million) primarily due to the increase in capacity flown. Airline
ancillary revenue per seat of GBP19.47 (Q3 FY21: GBP13.14)
continues to benefit from cabin bags and bundles delivering
incremental revenue.
Group headline costs for the quarter ending 30 June 2022 were
GBP1,869 million (Q3 FY21: GBP531 million), primarily driven by the
higher level of capacity flown compared to the same period last
year as well as the operational challenges seen through the period
which have resulted in GBP133m of disruption costs.
Group headline loss before tax for the quarter ending 30 June
2022 was GBP114 million, a GBP204 million improvement compared to
the GBP318 million loss in Q3 FY2 1. Included in the headline loss
was a GBP36 million loss from balance sheet FX revaluations.
easyJet continues to have a strong investment grade balance
sheet and has one of the lowest net debts in European aviation. As
at 30 June 2022, easyJet's net debt was GBP0.2 billion (31 March
2022: GBP0.6 billion) including cash and cash equivalents and money
market deposits of GBP3.9 billion.
Disruption management and current operations
As previously disclosed, proactive action was taken to build in
additional resilience including the consolidation of capacity in Q3
and Q4, in conjunction with other measures. Given easyJet's high
frequency network, over 70% of affected customers were moved onto
an alternate flight within 24 hours.
We believe that these capacity/cost impacts are a one-off this
summer as we would expect all parties to build greater resilience
in time for 2023 peak periods.
Slot addition
During the third quarter easyJet won 18 daily slots (9 slot
pairs) at Lisbon airport, achieving growth in a highly slot
constrained airport. These slots will result in easyJet becoming
the second largest airline at the airport. The additional capacity
enabled by the new slots will be deployed starting in October.
Approved aircraft purchase
After obtaining shareholder approval earlier this month, easyJet
has agreed to purchase an additional 56 A320neo family aircraft for
delivery between FY26 and FY29, as well as converting 18 planned
deliveries of A320neo aircraft to 18 A321 neo aircraft. These
aircraft will continue the modernisation of the easyJet fleet,
delivering both cost and sustainability benefits to easyJet, as
well as facilitating further up-gauging of the fleet.
Sustainability
easyJet has signed a Letter of Intent with Airbus to support the
development of carbon removal technology and to explore the
opportunity to secure a future supply of carbon removal credits
from direct air capture technology.
In addition, easyJet and Rolls-Royce announced a ground-breaking
new partnership to develop technology for hydrogen combustion
engines with the potential to power narrow body aircraft. Both
parties have agreed to work together on a series of engine tests on
the ground starting later this year, and also have a shared
ambition to take the technology to the air.
easyJet has committed to achieve net-zero carbon emissions by
2050 and we believe that zero carbon emission technology will
ultimately enable us to achieve "net-zero" flying. easyJet remains
committed to net zero and will announce its Net Zero Pathway later
this year.
Outlook
easyJet currently expects capacity in Q4 to be c.90% of Q4'19
with load factors above 90%. easyJet's Q4 schedule is now 71%
booked, 1ppt ahead of this point in FY19. Q4 sold ticket yield is
currently 13% above FY19.
easyJet is currently c.83% hedged for fuel in Q4 of FY22 at
c.$705 per metric tonne, c. 60% hedged for fuel in H1 of FY23 at c.
$784 per metric tonne and c. 33% hedged for fuel in H2 of FY23 at
c. $879 per metric tonne. The spot price on 22 July 2022 was around
$1,090.
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 FGS Global +44 (0) 7947 740 551 / (0) 207 251
3801
Dorothy Burwell FGS Global +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. easyJet holidays highest FY profit of GBP10m was in FY13 and
includes hotel only commission, this was under the prior business
model
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July 26, 2022 02:00 ET (06:00 GMT)
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