EasyJet says pandemic causes annual loss of over $1 billion

FILE PHOTO: Easyjet airline airplanes are seen parked, as Schiphol Airport reduces its flights due to the coronavirus disease (COVID-19) outbreak, in Amsterdam, Netherlands

British airline easyJet EZJ.L warned it would report an annual loss of as much as 845 million pounds ($1.09 billion), its first ever, and said it kept its finances under review as the pandemic meant it was only flying 25% of planned capacity.

The airline has signalled to the government that it may need further financial support, according to media reports on Thursday.

For the 12 months to the end of September, easyJet said it expects to report a headline loss before tax in the range of 815 million pounds to 845 million pounds, worse than the consensus forecast of 794 million pounds, according to Refinitiv data.

That is the first time easyJet, which was founded in 1995, has ever made a full-year loss.

EasyJet said that ongoing travel restrictions meant it would fly just 25% of planned capacity for the rest of 2020, meaning its finances will continue to remain under pressure.

“EasyJet will continue to review its liquidity position on a regular basis and will continue to assess further funding opportunities, including sale and lease backs, should the need arise,” the airline said in its statement on Thursday.

To survive the pandemic so far, easyJet has taken a 600 million pound loan from the government, cut 4,500 jobs; raised 608 million pounds from selling aircraft and tapped shareholders for 419 million pounds.

The company said it was focused on flying profitably to conserve cash and that had helped it reduce cash burn in its fourth quarter period compared to the third quarter.

The airline will formally report its annual results on Nov. 17.

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