British low-cost carrier Easyjet has warned that its first annual losses could reach 845 million pounds ($1.1 billion), as it flies at only 25% of its planned capacity due to restrictions imposed to curb the spread of the coronavirus (COVID-19) pandemic, Reuters reports.
Low-cost carrier Easyjet estimates that pre-tax losses for the fiscal year ending September 30, 2020, could range between £815-845 million. These losses exceed analyst estimates of £794 million.
This is the first time Easyjet, founded in 1995, has recorded annual losses.
CEO Johan Lundgren called on British authorities on Thursday to “accelerate the plan of measures” to help airlines.
To survive the crisis, Easyjet took a £600 million government loan, laid off 4,500 employees, sold aircraft generating £609 million, and received £419 million from shareholders. However, the airline’s debt reached £1.1 billion, up from £326 million last year. In the last 12 months, passenger numbers fell by 50% to 48 million, and capacity decreased by 48% to 55 million seats.
Frequently Asked Questions
What is Easyjet’s estimated loss for the 2020 fiscal year?Easyjet estimates pre-tax losses between £815 million and £845 million for the fiscal year ending September 30, 2020.
How has the pandemic affected Easyjet’s operations?The airline is currently flying at only 25% of its planned capacity, with passenger numbers dropping by 50% to 48 million over the last year.
What measures has Easyjet taken to survive the financial crisis?The company secured a £600 million government loan, raised funds through aircraft sales and shareholders, and reduced its workforce by 4,500 employees.