easyJet posts first-ever annual loss at £1.27 billion

©easyJet is one of the carriers hit hard by the U.K.'s new travel rules

After more than eight months of heavily reduced demand for flights as a consequence of the COVID-19 pandemic, Europe’s second-largest low-cost carrier, easyJet, has posted an annual loss of £1.27 billion as at the end of September.

However, the recent positive announcements concerning vaccines aimed at combatting the coronavirus have resulted in a 50% increase in demand for flights according to the carrier’s chief executive, Johan Lundgren. EasyJet’s shares rose 45% last week, helped by the vaccine news. Shares in the company were up 1.6% to £7.88 at 08:02 GMT on November 17, in a release which Goodbody analysts said contained “no surprises … which can be taken well”.

The pandemic has hammered easyJet’s finances, forcing it to take on more debt, turn to shareholders for additional cash and sell multiple aircraft, but Lundgren was keen to reassure investors. “No, we think we’re in a good position … at this moment in time,” Lundgren said when asked if easyJet would need to raise more money. “But we also said that we’re going to continue to review all the options that are out there to make sure that we can cope with the circumstances and you know there’s still a lot of uncertainty about when the recovery is going to take place.”

After talks with the Bank of England and the U.K. government’s finance ministry, easyJet will extend its borrowing under a COVID Corporate Finance Facility, staggering repayments and relieving pressure on its balance sheet. Quarterly cash burn, a gauge watched by investors eager to see costs reduced, improved to £651 million from £774 million pounds in the previous period. (£1.00 = US$1.33 at time of publication.)

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