easyJet shares were down 2.7% to 424.8p in early morning trading on Monday following a slate of disruptions to the group’s flights, which sent costs beyond the limits of previous guidance and saw passengers flung into chaos.
easyJet highlighted that the unprecedent surge in customer demand had led to operational issues including air traffic control delays and staff shortages in ground handling and at airports, resulting in delayed departures and flight cancellations.
The company pinned the blame on the tight labour market and mentioned its reduced resilience, reflected in flight caps recently announced at London Gatwick and Amsterdam airport, two of the firm’s largest customer bases.
The group commented it was proactively managing the disruptions by providing customers with advance notice and the potential to rebook onto alternative flights.
easyJet said it expected to rebook the majority of customers on alternative flights, with many on the same day as their original flight bookings.
The firm noted a projected a Q3 capacity of 87% of FY 2019 levels and a Q4 capacity at 90% of FY 2019 levels.
easyJet mentioned a cost impact from the disruption, alongside enhanced resilience the company has been putting in place including wet leased aircraft, crew costs and airport charges.
The group confirmed it would be exceeding its previously provided operating CASK ex fuel guidance, however it added that it believed the summer upset to be a one-off occurrence as it expected all parties to build higher resilience in time for FY 2023 peak periods.
The company noted that booking momentum had continued, with demand for summer travel remaining strong and Q3 currently 86% sold with ticket yields up 2%. Q4 is currently 48% sold and ticket yields up 14%, with its Q4 booking position broadly in line with the same period in FY 2019.
easyJet commented it would keep fine-tuning its schedule in line with industry conditions across summer to deliver results for its customers.
The firm said its medium-term outlook remained attractive, and mentioned it recently won an additional three aircraft worth of slots at Lisbon airport, which are scheduled to become available this winter.
“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,” said easyJet CEO Johan Lundgren.
“While in recent weeks the action we have taken to build in further resilience has seen us continue to operate up to 1700 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.”
