easyJet’s financial performance is continuing to be loss-making this year. As we know, many airlines have been struggling since the aftermath of the pandemic, which has been rocky at the best of times. During the pandemic, many airlines lost out due to a reduction in demand as a result of pandemic restrictions. Afterwards, airlines lost out due to a surge in demand after pandemic restrictions were lifted when the number of staff was not enough to cope as many had been laid off during the pandemic. As a result, many airlines had to cut their numbers of flights as demanded by airports. easyJet was, however, proactive in reducing its numbers of passengers to help airports such as London’s Heathrow at that time.
easyJet’s Financial Performance
Unfortunately, however, easyJet’s financial performance has not improved into the profit zone. In its year-end release back in September 2022, easyJet made a loss of 208 million pounds. This followed a third-quarter loss of 114 million pounds back in June 2022. Now it seems the pre-tax loss is even worse now as the pre-tax loss was 415 million pounds for the six months up to 31st March 2023. However, when compared to the loss made at the same time in the previous year, the performance appears to be better. In the six months up to the 31st March 2022 easyJet made a loss of 545 million pounds. This translates into a 24% improvement in the loss made in the six months up to 31st March 2023 when compared to the six months up to 31st March 2022. One can say, therefore, that even though the loss is more when compared to the third quarter of last year as well as well as the company’s year-end in September 2022, there is a marked improvement in easyJet’s financial performance when compared to the same time period last year.
In terms of easyJet’s revenue (total money received), it appears that easyJet’s financial performance has improved significantly. In the six months up to 31st March 2023 easyJet’s revenue was 1.75 billion pounds. This is a 78% improvement on the 985 million pounds made in the six months up to 31st March 2022. As one can see, revenue has improved by 78%, whereas the loss before tax has improved by a lesser percentage of 24%. This means that easyJet is becoming more popular with customers, but cost control is not improving. From previous releases, easyJet has stated that the war in Ukraine has increased costs. This, as we know, has been a problem for many airlines due to operational difficulties in planning routes and hikes in fuel prices due to the resulting sanctions on Russia.
The Company’s Response
The company’s response to easyJet’s financial performance was overall positive, commenting on the improvement made when compared to the same time last year despite setbacks such as the war in Ukraine as well as inflation. The report also states that the company is ramping up its capacity (the number of passengers it can fly) to pre-pandemic levels by this summer. Between January and March, capacity improved by 40%. John Lundgren, easyJet’s CEO, has commented positively on the improvement in revenue and the potential for more growth as capacity improves.
Even though easyJet’s financial performance is still loss-making, the company appears to be very positive about the company’s improvement in performance when compared to the same time period last year. The company also appears to have positive expectations of further growth later on in the year. We have to wait to see how this progresses.