EasyJet will benefit from the cost-of-living crisis as cash-strapped Britons look for budget holiday options, according to the airline's chief executive. Johan Lundgren was speaking after easyJet posted narrowed annual losses following a record summer performance.
The group reported underlying pre-tax losses of £178 million for the 12 months to September 30 against losses of £1.1 billion the previous year. EasyJet claimed its best earnings for a single quarter over the summer, at £674 million on an underlying basis.
That came as the end of pandemic travel restrictions put overseas holidays back on the agenda for many people. Since then, soaring inflation has put pressure on household finances.
But Mr Lundgren said consumers will prioritise holidays, adding that bookings for next spring and summer are already looking positive. "EasyJet does well in tough times," he said.
"Legacy carriers will struggle in this high-cost environment. Consumers will protect their holidays but look for value, and across its primary airport network, easyJet will be the beneficiary as customers vote with their wallets.”
But the low-cost carrier cautioned over “market-wide” cost increases and said its first-half fuel expense was set to be more than 50% higher year-on-year because of inflation. The group’s costs – excluding fuel – jumped 106% over the past year to £4.6 billion.
EasyJet is hiking ticket prices in response, with prices looking “strong” for next Easter. EasyJet remained in the red over the past year as it was hit by £78 million in disruption and compensation costs caused by the travel chaos over the summer as flights were delayed and cancelled due to airport staff shortages.
This masked a record-breaking final quarter, with its flight programme back to around pre-Covid levels. Full-year passenger numbers jumped 242% to 69.7 million on the pandemic-hit previous year.
