TIDMEZJ
RNS Number : 0017V
easyJet PLC
04 August 2020
4 August 2020
EASYJET TRADING STATEMENT FOR THE QUARTERED 30 JUNE 2020
easyJet's Q3 performance is in line with expectations, ending
the period with a re-start to flying.
A strong focus on cost and delivering profitable flying continue
to be key priorities.
Johan Lundgren, CEO of easyJet, commenting on its Q3 trading
said:
"Returning to the skies again allows us to do what we do best
and take our customers on much-needed holidays. I am extremely
proud of all of our people whose care and commitment, along with
the introduction of our industry-leading bio security measures,
have resulted in customer satisfaction scores reaching a high of
80% since the re-start, an increase of 13 percentage points
compared to the same period last year.
"I am really encouraged that we have seen higher than expected
levels of demand with load factor of 84% in July with destinations
like Faro and Nice remaining popular with customers.
"Our bookings for the remainder of the summer are performing
better than expected and as a result we have decided to expand our
schedule over the fourth quarter to fly c.40% of capacity. This
increased flying will allow us to connect even more customers to
family or friends and to take the breaks they have worked hard
for.
"Despite the challenge we continue to face due to the pandemic,
we remain no less committed to fulfilling our customers' desire to
fly sustainably through our carbon reduction initiatives, including
offsetting on behalf of our customers.
"As we look ahead, I am confident that easyJet will continue to
serve our customers well, delivering our renowned friendly service
and value across our unrivalled network."
Revenue
Total group revenue for the quarter ending 30 June 2020 was GBP7
million. The fleet was fully grounded on 30 March due to the
Covid-19 pandemic. Having re-started flying on 15 June, easyJet
carried 117,000 passengers with a total capacity of 132,000 seats
in the remaining two weeks of the quarter. The initial schedule
comprised only 10 lines of flying and delivered a load factor of
88.9%.
We have now completed more than one month of restart operations
and are seeing encouraging performance across the network with a
continued focus to undertake only profitable flying. In July
easyJet flew just over 2 million passengers with a load factor of
84%.
Cost / Cash burn
Total headline costs for the quarter ending 30 June 2020 were
GBP332.1 million which is 79% lower than Q3 2019.
Operational cost cash burn during the quarter was lower than the
previously guided GBP30 - GBP40 million per week with a total cash
burn for Q3 of GBP774 million compared to the previously guided
GBP1 billion.
As previously announced, easyJet has launched a major
restructuring programme which aims to drive cash generation and
ensure that easyJet emerges from the pandemic in an even more
competitive position. The programme will drive down costs in all
areas of the business which is a necessity in the current Covid-19
environment. It includes rightsizing the organisation and reducing
headcount by up to 30%. easyJet has launched an employee
consultation process on these proposals to reduce staff numbers, as
well as optimising our network and bases, improving productivity
and promoting more efficient ways of working.
We are fully committed to work closely and constructively with
our employee representatives during these consultations.
Customers and operations
Although flying has been limited, easyJet has seen overall
customer satisfaction (CSAT) hit a high of 80% since the re-start,
a 13ppt increase compared to the same period last year, driven by
operational performance and the management of Covid-19
policies.
During July customer satisfaction rose by double digits in every
single one of our major markets, with extremely strong improvements
in overall customer satisfaction in Portugal, the Netherlands, the
UK and Switzerland. Customers who have flown with us since the
restart have expressed particular satisfaction with the cleanliness
and tidiness of the aircraft (up 10ppts year on year) and with the
boarding experience (up 9ppts year on year).
This is testament to the fantastic job all our people are doing
during this challenging period. It also reflects the enhanced bio
security measures which were introduced in June:
-- Aircraft cleaning - Every aircraft is subject to a daily
disinfection process which provides surface protection from viruses
that lasts for at least 24 hours
-- On board measures - All passengers and crew are required to
wear masks onboard at all times. easyJet's aircraft are already
fitted with state of the art filtration technology. High Efficiency
Particle Arresting filters remove 99.97% of airborne contaminants
in the cabin, including viruses and bacteria. These filters are the
same as those used in hospitals and ensure that the cabin air gets
replaced every 3-4 minutes
-- Airport measures - To protect customers and ground crew in
the airport, customers are able to use our automated bag drop to
check in their hold luggage and screens will be in place at our
check-in desks and at airports where auto bag drop is not
available. easyJet already encourages all customers to check in
online and download their boarding pass onto their smart phone or
to print their own boarding passes before arriving at the
airport.
These bio security measures will remain in place for as long as
is needed to ensure customers and crew are able to fly safely as
the world continues to deal with the impact of the Covid-19
pandemic. easyJet will continue to work with the relevant national
authorities to review and assess what measures are required in the
longer term.
Capacity
easyJet's commercial flying programme restarted on 15 June with
a focus on delivering a positive contribution. The initial schedule
started with 10 aircraft, flying a predominantly domestic schedule
in the UK, France and Italy.
Demand is being assessed on a daily basis with updated schedules
being reviewed every two weeks based on our forecasts of demand and
contribution. Following expected improvements in demand and a
further relaxing of government travel restrictions, the July
schedule was increased to 147 lines of flying. August flying is now
expected to increase further to c.210 lines of flying.
Our crews and aircraft have been kept in flight-ready mode, in
order that we have the flexibility to alter capacity either up or
down with around two weeks' notice.
We now expect to fly c.40% of planned capacity for Q4, peaking
in August, compared to the 30% highlighted at our H1 results.
Network
easyJet's market-leading European short haul network is focused
on number one and two positions at primary airports and enables us
to be efficient with our network choices, with an emphasis on
maximising returns. The scale and flexibility of our network also
provide us with the opportunity to realign capacity to take
advantage of these changes in the competitive landscape. easyJet
will act quickly to selectively acquire attractive slots made
available in locations where the opportunity arises.
Our late summer bookings are performing well, with beach
destinations such as Faro and Nice proving popular, as well as city
destinations like Amsterdam and Paris, reflecting our customers'
interest in getting away for a summer holiday or city break.
easyJet believes that the UK Government has the opportunity now
to use the temporary removal of Air Passenger Duty to support the
recovery of UK aviation. The pandemic is having an unprecedented
impact on the aviation sector. It is one of the worst hit
industries, and government action is needed across Europe to retain
connectivity and a viable airline infrastructure. Without this we
risk long term damage to the recovery. This would significantly
quicken the reintroduction and growth of the number of flights and
routes available in the UK, particularly outside London.
Liquidity
During the quarter 9.99% of share capital was issued, following
a share placing on 25 June. At the General Meeting held on 14 July
approval was granted for the issue of a further 5%. Gross proceeds
raised on the total 14.99% issuance was GBP419m.
This brings the total liquidity raised to date since the
beginning of the Covid-19 pandemic to over GBP2.2 billion. This
comprises GBP400 million from drawing down our Revolving Credit
Facility, GBP600 million from the UK government's Covid Corporate
Financing Facility, GBP400 million from two term loans, GBP405
million in proceeds from a programme of sale and leaseback
transactions and the GBP419 million of equity issuance.
There are further expected sale and leaseback proceeds within
the current programme still to be transacted. We expect gross
proceeds from the programme to be at the top end of our GBP500 to
GBP650 million guidance range. Following the conclusion of the sale
and leaseback programme it is expected that around 50% of the fleet
will still remain unencumbered.
These measures have further underpinned easyJet's liquidity
position and credit metrics while also enhancing our balance sheet
strength to provide a significant liquidity buffer to navigate
protracted Covid-19 recovery scenarios.
As at 30 June 2020 our net debt position was GBP835 million (31
March 2020: GBP467 million; 30 June 2019: GBP332 million)
representing cash equivalents of GBP2,562m and gross debt including
leases of GBP3,397m. This position includes the first tranche of
the equity placing amounting to GBP279m.
Since the quarter end GBP137 million in cash was received from
the second tranche of the equity placing and c.GBP140 million of
proceeds from sale and leaseback deals. To date, total sale and
leaseback proceeds amount to GBP405m.
Sustainability
easyJet remains the only major international airline in the
world to fly net zero carbon, by offsetting the carbon emissions
from the fuel used on every plane flown. This financial year we
have already retired carbon credits to offset 2.2 million tonnes of
CO(2) emissions, investing in high quality rainforest conservation
projects in Peru and Ethiopia. easyJet also selects projects that
have much wider benefits, so in addition to carbon they deliver a
range of social and biodiversity benefits which are equally as
important to the local community.
For the longer term easyJet is committed to collaborating on the
development of new technologies, such as electric and hydrogen
flying. easyJet CEO Johan Lundgren has joined the Jet Zero Council
in order to help set UK aviation's path for decarbonisation.
Outlook
Based on current travel restrictions in the markets in which we
operate:
-- easyJet expects to fly c.40% of planned capacity for Q4 2020.
This compares to the 30% highlighted previously, and;
-- based on the current schedule, easyJet expects to record a
smaller loss in Q4 than was experienced in Q3
At this stage, given the continued level of short-term
uncertainty, it would not be appropriate to provide any other
financial guidance for the remainder of the 2020 financial
year.
KEY Q3 FINANCIALS
Three months ended 30 June 2020 30 June 2019 Change
Fav./(adv.)
Number of flights 709 165,656 (99.6%)
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Number of aircraft in operation 10 315 (96.8%)
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Passengers (thousand) (1) 117 26,382 (99.6%)
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Seats flown (thousand) 132 28,772 (99.5%)
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Load factor (%) (3) 88.9% 91.7% (2.8ppt)
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Total group revenue (GBP million) 7 1,761 (99.6%)
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Total group headline cost (GBP
million) (332.1) (1,587.2) 79.1%
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Group headline loss before
tax (GBP million) (324.5) 174.2
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For further details please contact easyJet plc :
Institutional investors and analysts:
Michael Barker Investor Relations +44 (0) 7985 890 939
Holly Grainger Investor Relations +44 (0) 7583 101 913
Media:
Anna Knowles Corporate Communications +44 (0) 7985 873 313
Edward Simpkins Finsbury +44 (0) 7947 740 551 / (0) 207 251 3801
Dorothy Burwell Finsbury +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.
This information is provided by RNS, the news service of the
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of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
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