Bookings take-off at EasyJet after new testing rule changes for vaccinated flyers with capacity for summer nearing pre-pandemic levels
- Testing rules on fully-vaccinated travellers to be scrapped from 14 February
- EasyJet’s load factor fell from more than 80% in November to 67% in December
- Wizz Air revealed yesterday that its trade had been hurt by the Omicron variant
EasyJet says bookings have taken off following statements earlier this month to loosen restrictions on foreign travel.
The budget airline said it enjoyed significant growth in demand after the Government relaxed curbs on pre-departure testing earlier this month and declared on Monday that testing rules on fully-vaccinated travellers would end from mid-February.
On-sale capacity for the upcoming summer holiday season is now close to pre-pandemic volumes compared to just over two-thirds for the current quarter, according to the group.
Omicron effect: EasyJet’s load factor declined from over 80 per cent of their pre-Covid levels in October and November to 67 per cent in December
Like other British airlines, EasyJet has admitted that the recent travel restrictions imposed in response to the Omicron variant have impacted demand for flights and is expecting its short-term performance to remain affected.
Its load factor – the proportion of seats containing passengers – declined from more than 80 per cent of their pre-Covid levels in October and November, before new travel curbs were implemented in the UK, to 67 per cent in December.
But thanks to the roll-out of the booster programme, which has seen over 37million people vaccinated in the UK and the lower severity of Omicron, the Government has decided to relax overseas travel regulations.
Following the announcement earlier this month that pre-departure testing would be lifted for fully-vaccinated travellers and under-18s from 9 January, EasyJet said there was a ‘step change improvement’ in bookings.
The company noted ‘a further boost’ after the authorities confirmed that fully-vaccinated travellers would no longer be subject to testing rules from 11 February, while others will only have to take a pre-departure test and a PCR test within two days of arriving in the UK.
Johan Lundgren, chief executive, said: ‘We believe testing for travel across our network should soon become a thing of the past.’
Revival: EasyJet said bookings improved after the UK Government declared in early January that pre-departure testing would be lifted for fully-vaccinated travellers and under-18s
He adds: ‘We see a strong summer ahead, with pent up demand that will see easyJet returning to near 2019 levels of capacity with UK beach and leisure routes performing particularly well.
‘We remain confident that EasyJet will continue to win customers and are excited about our plans for the summer as we identify further opportunities at our key bases which, alongside our step-changed ancillary offering, will deliver strong, sustainable shareholder returns.’
EasyJet’s trading update comes the day after fellow low-cost airline Wizz Air revealed its business had been hurt by the Omicron variant and renewed travel restrictions.
Future hopes: ‘We believe testing for travel across our network should soon become a thing of the past,’ commented EasyJet’s chief executive Johan Lundgren (pictured)
Yet while Budapest-based Wizz Air saw its reported loss surge by about 130 per cent annually to €267.5million for the last three months of 2021, EasyJet’s losses plunged by almost half to £213million.
Both companies have been beset with much higher costs as capacity has returned and staff numbers have expanded, but Liberum analyst Gerald Khoo said EasyJet had used the pandemic to manage its cost base better.
He said it had done so through using seasonal pilot contracts more often and increasing its slots at major congested airports, which tend to have higher returns, as other airlines have retreated.
Because of this and the strong recovery in passenger demand, Liberum has maintained its buy recommendation for the air carrier.
Meanwhile, Hargreaves Lansdown equity analyst Matt Britzman said: ‘A focus on short-haul travel puts easyJet in a better position than its long haul rivals when it comes to capturing returning passengers.’
He added: ‘There’s no denying the next few months still look challenging, but there’s a glimmer of hope on the horizon with so many more holidaymakers preparing to pack their bags.’
EasyJet shares were up 0.6 per cent at 639.3p during the late morning on Thursday. However, their value remains over 40 per cent below where it was three years ago.