EasyJet Expects to Post a Third Financial Loss

EasyJet (LON:EZJ) has warned it expects to post a third annual loss despite the budget airline showing "resilience" to headwinds and summer disruption.

The UK-based airline said in a trading update that it would report a group overall pre-tax loss of between £170 million and £190 million for the full year. Europe's second-largest discount airline pointed to the impact of "operational issues" affecting the aviation industry in the third quarter ended June 30, saying a post-pandemic surge in passenger demand and labor shortages led to an increase in cancellations. Subsequent disruption costs amounted to around £75 million, while the recent rise in the value of the US dollar also impacted a one-off expense of £64 million. Taking into account the expected loss, easyJet added that the board will not recommend a dividend payment for the financial year to September 30, 2022. However, easyJet said its operations were still significantly improved thanks to "management measures" taken to mitigate potential problems. As a result, fourth-quarter flight cancelations remained below pre-COVID levels. "We face the uncertain macro-economic environment with many strengths thanks to our brand, network and business model, which enable us to offer low fares to millions despite the rising cost of living," Chief Executive Johan Lundgren said in a statement. Looking ahead to the first quarter of the 2023 business year, easyJet predicted that passenger numbers will reach 20 million, up more than 30% year-on-year. Load factors, a measure of available seats filled with passengers, are also "currently ahead" from the same point in 2019. The company will announce its full 2022 results on November 29. Follow Global Economic Developments on Social Media! Click here to follow Ieconomy official Facebook account! Click here to follow Ieconomy official Instagram account! Click here to follow Ieconomy official Twitter account!