EasyJet Swings to a Historic Loss, Emirates Lost $3.4 Billion
EasyJet said its revenue plummeted over 50% for the full year through the end of September due to the coronavirus pandemic that battered the airline industry. The company reported full-year revenue of £3 billion ($3.97 billion), down 52.9% from last year.
During the year, the number of EasyJet passengers plunged by 50% as the coronavirus outbreak forced people to stay at home and brought nationwide lockdowns and travel restrictions. The British low-cost airline said it is now expecting to carry out only around 20% of its planned flights in the final quarter of the year.
Johan Lundgren, Chief Executive of EasyJet, said the company was on a good path to start recovering even though its business took a heavy blow this year.
“We also know the attraction to the brand in terms of the trust it generates for customers, and also, the value for money that we represent gives a good foundation and bounce back strongly when the recovery comes,” Lundgren said.
“The longer these travel restrictions are in place, it actually increases pent-up demand,” he added.
EasyJet said its sales skyrocketed by 876% in just five days after the British government decided to lift mandatory quarantine for travelers arriving from the Canary Islands.
Lundgren also said the recent positive news about the coronavirus vaccine development was great news for the company. American drugmakers Pfizer and Moderna said their coronavirus vaccines were over 90% and 94.5% effective, respectively.
Effects of the coronavirus pandemic also led Emirates Airline to losses for the first time in over 30 years, the airline said. Emirates said it lost $3.4 billion in the period between March and September.
"We started our current fiscal year in the midst of a global blockade when air passenger traffic was literally at a standstill. In this unprecedented situation for the aviation and travel industry, the Emirates Group recorded a half-year loss for the first time in over 30 years," said Sheikh Ahmed Bin Saeed Al Maktoum, CEO of Emirates Airline.
He said that Emirates had to halt its operations for weeks because of the pandemic, before being allowed to bring flights back to service, which helped revenues recover from 0 to 26% of revenue reported in the year-ago period.
Emirates’s revenue plummeted around 75% to $3.2 billion in the period between April 1 and September 30. The company served only around 1.5 million passengers during that period, 95% lower than last year.
Tim Clark, Chairman of Emirates, said the company had to dismiss around 9,000 staff as a result of operations halt and weaker demand.
More Adjustments Announced
American Airlines said it intends to reduce a large part of its flight capacity to London in December from major US airports on the back of weak demand due to the coronavirus pandemic.
As a result of the resurgence in coronavirus infections amid the second wave, the US and Britain imposed new measures to slow down the spread of the pandemic, heavily weighing on demand.
United will halt flights from Charlotte, John F. Kennedy International Airport, and Chicago O’Hare to London Heathrow in December, cutting a total of 16 flights a week to England’s capital.
Instead, travelers who want to go to London will be able to fly with British Airways, while American Airlines will continue to operate cargo-only flights between London, New York, and Chicago until January, the company’s spokesperson said.
“We’re constantly evaluating our network to match supply and demand and have been making regular schedule adjustments since March,” the spokesperson said.
“In an effort to match low demand resulting from coronavirus (COVID-19), we continue to operate a reduced schedule.”
Elsewhere, International Consolidated Airlines Group, known as IAG, has reduced the buyout price for the Spanish airline Air Europa to €300-€400 million ($355-$474 million).
IAG, which owns British Airways, reportedly plans to fund the acquisition in shares. The company agreed to acquire Air Europa for about €1 billion ($1.188 billion) before the coronavirus outbreak occurred.
A large discount was possible after the Spanish government approved a new €475 million ($564 million) stimulus package for Air Europa earlier this month.
The coronavirus pandemic has pummeled the airline industry this year, with EasyJet reporting a 50% drop in full-year revenue and Emirates suffering a loss for the first time in more than 30 years.
Additionally, American Airlines said it plans to reduce a majority of its service to London as a result of weak demand, while IAG managed to slash the acquisition price for the Air Europa by 60% to 70%.