EasyJet is doing everything it can to accelerate its recovery from Covid, but there just isn’t enough momentum to swing the company back to positive earnings.
It has now suffered annual losses for three years in a row and investors have had to stomach share price weakness and no dividends for that period.
While forecasts suggest it will move back into profit during its new financial year (ending 30 September 2023), EasyJet’s post-pandemic journey has had more twists and turns than a rollercoaster at Alton Towers.
AJ Bell’s Russ Mould said: “It is trying to put across a positive message: losses are narrowing, it has high levels of cash to provide a buffer if the recovery takes longer than expected, and the holidays business is profitable and growing. In difficult times such as now, consumers will seek value for money and EasyJet believes its proposition ticks the right boxes.
“However, if you exclude peak periods like half-term, Christmas and New Year, the airline is having to work extra hard to fill planes. That suggests ticket prices will have to come down during non-peak periods to entice people to book, which is great for the customer but bad for the airline when you consider that cost pressures are still intense on the aviation industry. If that happens, it’s fair to assume that peak airfares will go even higher to compensate.”
Leave a Comment