The easyJet share price (LON:EZJ) rose over 9% in early trade on Thursday in a broad travel sector rally that also saw Carnival and IAG up over 6% and 4% respectively.
The jump in easyJet shares came as the airline released their trading update for the six months ending 31st March. easyJet said it saw a loss of between £185m to £205m for the winter trading period. This is a material improvement on 2019 when the company posted a loss of £275m.
The company said swift cost cutting measures in the last few weeks of the period when coronavirus began to ground flights has helped to minimise losses in the first half.
“Our first half trading performance was very strong prior to the impact of coronavirus, which shows the strength of easyJet’s business model,” said Johan Lundgren, easyJet CEO.
Airlines typically post losses across the Autumn and Winter months and make up for it in the Summer months.
However, this year’s Summer trading period is going to be severely disrupted by the coronavirus lockdown. Much of the period is likely to be blighted by grounded flights or a severely reduced schedule.
To combat these measures easyJet brought forward the release of winter 2020/2021 tickets and have enjoyed a significant increases in sales as passengers plan trips for when coronavirus lockdowns may have eased.
The airline also said it had deferred the delivery of 24 aircraft and raised finance to ensure to financial strength of the group through the grounding of flights.
easyJet share price
The rally in the easyJet share price also came a day after European countries announced plans to begin the reopening of their economies. Germany said it was to reopen schools and small shops in early May whilst President Trump said the US was past the peak.
This is ultimately the first step towards passengers being able to take flights again and has caused optimism among investors.
easyJet shares rose as highs 659p on Thursday morning before the initial rally faded.
Despite the sharp rise today, the easyJet share price is still down 54% year to date.