Cancelled flights could cost easyJet up to £200m
easyJet could be forced to pay up to £200m this year following its decision to slash services to guarantee smoother operations at EU airports.
Analysts at Bernstein have forecast the cancellations that took place since Easter could amount to a bill of between £100m and £200m, while Peel Hunt said it now expects the airline to post a loss for the year.
“Whilst demand is robust, with good forward bookings and fares, staff shortages are impacting airports and airlines, causing increased turnaround times and cancellations,” said Peel Hunt’s analyst Alexander Paterson.
“This reduces revenue whilst increasing unit costs, pushing a small forecast profit for FY22E into a loss.”
The guidance comes as easyJet’s boss Johan Lundgren told journalists yesterday the carrier couldn’t quantify how many flights it would have to axe to best manage the ongoing travel chaos at airports across the UK and EU.
In a trading update published on Monday, the low-cost airline announced it would bring June capacity down to 87 per cent of 2019 levels, CityAM reported.
“I can’t tell you how many flights will be impacted,” Lundgren told reporters. “It would be misleading for me to give any numbers today because we simply don’t know.”
easyJet is the latest industry stakeholder that was forced to take preemptive measures to tackle the travel crisis.
Gatwick on Friday said it would cut daily flights from more than 900 to 825 and 850 in July and August respectively, while Heathrow asked airlines operating from terminals 2 and 3 to cut 10 per cent of flights on Monday.