By Scott Wright
EASYET is to reduce flights at major airports following a hugely disruptive spell of cancellations as the company and wider aviation industry has struggled to cope with the surge in demand that has followed the easing of coronavirus restrictions.
The Luton-based airline has acted after flight caps were recently introduced at London Gatwick and Amsterdam’s Schipol, two of its biggest airports, to help ease the pressure caused by staff shortages across the industry.
EasyJet told the stock market that it is “proactively consolidating a number of flights across affected airports”, stating that the move “provides customers with advance notice and the potential to rebook on to alternative flights.”
The airline added: “Given easyJet’s high frequency network, we expect to be able to rebook the majority of customers on alternative flights, with many being on the same day as originally booked for.”
The aviation industry has been overwhelmed with demand since restrictions on travel were lifted. But having pared staff numbers back significantly during the first two years of the pandemic, the sector is now facing an acute shortage of personnel – in core areas such as airport staff, air traffic control, crew and ground handling – which has sparked widespread delays and cancellations.
The decision by easyJet to cut flights comes after the UK Government and Civil Aviation Authority intervened on Thursday (June 16) amid growing concern over the resilience of the industry as the summer holiday season approaches, and set out five specific expectations that they have for the industry. These include an expectation for summer schedules to be reviewed to make sure they are deliverable.
Following the changes announced yesterday, easyJet said it now expects its third quarter capacity, to 30 June 2022, to be around 87 per cent of its 2019 level. Capacity in the fourth quarter, to 30 September 2022, is now expected to be around 90% of what it achieved in 2019.
The company warned there would be a “cost impact” from the disruption, as well as from additional wet-leased (short-term lease) aircraft, crews costs and airport charges. It will now exceed its previously provided operating CASK (cost for available seat kilometres) guidance, excluding fuel.
EasyJet said it believes these cost impacts will be a “one-off” this summer, and expects greater resilience to have been built into the industry in time for the peak periods of 2023.
Chief executive Johan Lundgren said: “Delivering a safe and reliable operation for our customers in this challenging environment is easyJet’s highest priority and we are sorry that for some customers we have not been able to deliver the service they have come to expect from us.
“While in recent weeks the action we have taken to build in further resilience has seen us continue to operate up to 1,700 flights and carry up to a quarter of a million customers a day, the ongoing challenging operating environment has unfortunately continued to have an impact which has resulted in cancellations.
“Coupled with airport caps, we are taking pre-emptive actions to increase resilience over the balance of summer, including a range of further flight consolidations in the affected airports, giving advance notice to customers and we expect the vast majority to be rebooked on alternative flights within 24 hours.
“We believe this is the right action for us to take so we can deliver for all of our customers over the peak summer period in this challenging environment.”
EasyJet underlined that demand for travel this summer remains strong, noting that its third quarter was currently 86 per cent sold with yields up around 2%. Quarter four is 48% sold with yields up around 14%, broadly in line with the same point in 2019.
The company added that the medium-term outlook “remains attractive” and that it has won three further aircraft worth of slots at Lisbon Airport, which will become available from this winter.
Russ Mould, investment director at AJ Bell, said: “After weeks of chaos across UK airports, easyJet is taking proactive action to reduce the number of flights over the summer to help ease the pressure on transport hubs struggling to deal with the recovery in demand for flying.
“While this will give clarity to travellers wondering if they would get to the airport and see their flight cancelled, it does pour some cold water over easyJet’s earnings guidance as the costs are jumping higher. While there will be some disappointment among travellers affected by the forward cancellations, it could help to avoid a reputational disaster for easyJet should it have continued to leave people stressed on the day of travel.”
Shares in easyJet closed the day down 6p, or 1.4%, at 430.98p.
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