EASYJET has said it expects to make a loss before tax in the range of £535 million to £565m for the six months to the end of March, but it is “heading in the right direction”.
The low-cost airline said this is a reduction in its losses compared with the same period 12 months earlier which is “ahead of market expectations”.
It attributed this to improved trading and “self-help” measures such as optimising its network, strong sales of ancillary products and a “continued cost focus”.
Analysts said it should be in a position now to weather headwinds.
It comes against a backdrop of international volatility and with commentators pointing to staff disruption caused by pandemic-related absence and reduced labour pool because of Brexit.
The carrier operated at 80 per cent of 2019 capacity in the first three months of 2022.
READ MORE: Hundreds of flights cancelled over Covid absences
Delays in processing security checks for new airline crew, however, are increasing the number of flights being cancelled, easyJet chief executive Johan Lundgren.
He said the airline is waiting for the Department for Transport (DfT) to give permission for around 100 new members of staff to start work.
EasyJet has cancelled hundreds of flights in recent days, mainly on routes serving Gatwick Airport in West Sussex.
Mr Lundgren explained this is primarily due to high levels of coronavirus-related staff absences but also blamed the time it is taking for the Government to vet new recruits.
He said: “There’s this delay of the clearance from the DfT for people to get their IDs.
“There’s a backlog there and we’re waiting currently for about 100 cabin crew to get their IDs.
“There’s a three-week delay on that. That has had an impact. If that would have been on time, we would have seen less cancellations."
EasyJet also pointed to the invasion of Ukraine by Russia, but said it has “very little exposure in Eastern Europe, with no routes into Ukraine, Russia or Belarus".
It added that it has been involved in the refugee effort, saying: “Everyone at easyJet has been deeply shocked and saddened by the Russian invasion of Ukraine and we have looked at the best ways we can directly support those affected.
“We have been working closely with the UN refugee agency UNHCR, to provide seats on flights across our network as well as working with our charity partner UNICEF to support their work on the ground as part of the response effort.”
Zoe Gillespie, investment manager at Brewin Dolphin, said easyJet is “heading in the right direction, with bookings almost returning to pre-pandemic levels, revenue increasing, reduced costs, and a solid balance sheet”.
She said: “The airline has also hedged much of its fuel at a reasonable price and is largely unaffected by the situation in Ukraine – unlike competitors such as Wizz Air, which bid for easyJet last year.
“All things being equal, easyJet is in a positive position and the company should have the resilience to weather any oncoming headwinds, but you cannot rule out turbulence in the share price as geopolitical tensions and the cost of fuel remain high.”
Allegra Dawes, senior airlines analyst at Third Bridge, said the carrier still expects to reach capacity levels to reach those of 2019 by the fourth quarter of 2022.
She said it faces rising costs due to fuel pricing and operation ramp-up and continued operational difficulties as a result of Covid-19 and staffing shortages and “the road to a full recovery remains long and bumpy”.
She added: “Airlines have had a turbulent recovery since the pandemic. While restrictions have largely been lifted, Russia’s invasion of Ukraine has added a new level of uncertainty to the market.
“While EasyJet is not exposed to routes in the Ukraine or Russia, our experts expect volatility in jet fuel pricing to further slow the pace of the airline’s recovery.”
Shares in easyJet closed up 1.81%, or 9.8p, at 552.4p.
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