EasyJet eyes growth and acquisitions as Covid bounce back gathers pace

EasyJet chief executive Johan Lundgren said the airline has seen a surge in bookings as the UK further loosens its overseas travel restrictions.

EasyJet has said it will boost capacity to about 70% of 2019 levels this quarter, as the easing of travel restrictions in the UK triggers a surge in bookings.

The airline generated positive cash flow in the peak summer months and losses halved compared with a year earlier, it said.

Bookings have soared to places like Egypt and Turkey and capacity to the Canary Islands is at 140% of 2019 levels for the UK school holidays later this month.

“We have seen city breaks beginning to return alongside growing demand for leisure travel from customers looking for flights and holidays to popular winter sun destinations,” said EasyJet chief executive Johan Lundgren.

EasyJet got a late start to summer, flying at about 58% of 2019 levels for the months of July, August and September, as its home base in the UK lagged behind countries in the EU in loosening travel rules.

Now, the airline is looking to capture pent-up demand and seize opportunities for growth, even as the industry enters the slower winter season.

Capacity gains will continue in 2022, Mr Lundgren said. EasyJet will look to acquire take-off and landing slots at constrained airports, and isn’t ruling out the possibility of acquisitions, he said.

“The increased steer on capacity bodes well for the winter season,” Bernstein analyst Alex Irving said.

Still, EasyJet said ticket prices remain low as airlines add more capacity, while the industry is also under pressure from higher oil prices.

EasyJet is 55% hedged on jet fuel for the year through September 2022 at about $500 per metric ton, the airline said, as a rise in oil prices drove spot prices to $760.

After months of criticism from the airline industry, the UK last week allowed easier access to many destinations, while removing some of the testing requirements for fully-vaccinated people. EasyJet has been held back by a slower reopening of UK travel amid constantly changing travel curbs, even as rivals Ryanair and Wizz Air rapidly added on capacity.

EasyJet shares have risen by around 10% in the past month. However, airline shares were down in latest trading, with EasyJet shedding nearly 4% and Ryanair down by over 2%.

Meanwhile, Lufthansa has paid off a chunk of the German government’s remaining bailout package in the airline.

-Bloomberg and Irish Examiner