Budget airline easyJet has insisted that cash-strapped Britons will not abandon their overseas holidays in the face of rising costs, as it posted a narrow annual loss after a record summer performance.
The group reported underlying pre-tax losses of £178m in the 12 months to September 30 compared with losses of £1.1bn a year earlier.
EasyJet said it posted its best-ever single-quarter earnings over the summer to £674m on an underlying basis as the end of pandemic travel restrictions brought overseas holidays firmly back on the agenda
Chief Executive Johan Lundgren said consumers will prioritize holidays as they come under pressure from rising inflation, adding that bookings for next spring and summer already look positive.
But the low-cost carrier warned of cost rises “across the market” and said its first-half fuel spend would be more than 50% higher year-on-year due to higher inflation .
Group costs, excluding fuel, rose 106% over the past year to £4.6bn.
EasyJet is raising ticket prices in response, with prices looking “strong” for next Easter, even as it hopes its budget offering will help it weather the cost-of-living crisis.
Lundgren said: “EasyJet is doing well in difficult times. Legacy carriers will struggle in this high-cost environment.
“Consumers will protect their holidays but look for value, and through its core network of airports, easyJet will be the beneficiary when customers vote with their wallets.”
EasyJet remained in the red over the past year as it was hit with an extra £78m in disruption and compensation costs caused by travel chaos over the summer as flights were delayed and canceled ·lar due to staff shortages in its operations and airports.
This masked a record last quarter, with its flight schedule returning to pre-Covid levels, which helped full-year passenger numbers rise 242% to 69.7 million from a year earlier , affected by the pandemic.
The group said it had already started hiring for next summer to help avoid the disruption seen in 2022.
It has recently launched a cabin crew recruitment campaign targeting the over 45s to increase its workforce.
Lundgren said it had received a “phenomenal” response with applications increasing by 75% daily, adding that the group would be looking to extend the campaign outside the UK.
It is seeing applications outnumber advertised roles, with 19,000 applications for 2,000 cabin crew jobs.
EasyJet added that it would consider extending the deals as Europe’s smaller rivals are hit by the cost crisis, saying it would not “rule anything out”.
“There will be a number of airlines that will struggle … and they won’t have the resources to go through the uncertainty,” Lundgren said.
Shares in easyJet fell 3% in morning trading on Tuesday.
Matt Britzman, equity analyst at Hargreaves Lansdown, said: “Bottom line profits remain somewhat out of reach for easyJet, which has seen a wave of headwinds during the year since Omicron at first, to airport disruptions and flight cancellations more recently.
“Rather than heading for the emergency exit, easyJet has made the best of a bad year and full-year results mask a positive fourth quarter.”
He added that early signs of resilient demand for next year were encouraging.
“It is difficult to judge how long this willingness to maintain spending lasts, but with easyJet being positive about spring next year, it looks like holidays could be one of the last areas where spending will slow down,” he said .