easyjet’s woes were well-documented this summer as supply chain and staffing issues led to a large number of cancellations. This disruption was evident in easyjet’s 2022 full year trading update in which the budget airliner said they would record a headline loss before tax of between £170 million and £190 million.
easyjet attributed £75 million of costs to the disruptions throughout the summer.
The disruptions came as easyjet and other airlines ramped up capacity as holiday makers returned after the pandemic amid supply chain issues causing cancellations.
easyjet’s Q4 2022 capacity was 88% of pre-pandemic 2019 numbers.
“Profits are still delayed at easyJet, with full year pre-tax losses expected to be as high as £190m. A large chunk of extra costs stemmed from the industry-wide disruption experienced in the third quarter, with well-publicised flight cancellations and short staffing leading to a real drag on resources at the time easyJet needed it least,” said Sophie Lund-Yates, Equity Analyst at Hargreaves Lansdown.
Looking forward, easyJet are still way of pre-pandemic numbers and capacity actually fell in Q1 2023.
easyjet’s Q1 2023 capacity is up 30% year-on-year to around 20m seats. This, however, is only 83% of the capacity recorded in 2019, before the pandemic.
Analysts also pointed to the cost of living crisis as a head wind for easyJet.
“The combination of a higher cost of living and ongoing labor shortages are creating a more cautious environment around capacity and longer-term demand for the European low cost carrier segment,” said Peter McNally, Global Sector Lead for Industrials, Metals & Energy at Third Bridge.
easyjet addressed operational problems with management action but both investors and passengers want to see this in action in the busy summer period before confidence is restored.
“Operations have significantly improved as a result of management actions to mitigate the disruption that the whole airline ecosystem experienced through Q3,” said Johan Lundgren, CEO of easyJet.