No flights, no planes, no crew, no fares – November! Late autumn is, even on easyJet’s standard aviation calendar, quite the worst time of any year, but 2020 has been something else.
On Tuesday, the airline unveils its annual results from what it can only hope are the depths of the Covid-19 abyss. A trading update last month warned on much of the misery – losses of up to £845m, not counting “non-headline items” such as a £145m bad bet on fuel hedging, and the immediate £120m cost of laying off about a third of its staff. The cash burn of around £50m a week over summer “compared favourably” with the previous three months, it said.
Things certainly didn’t get much better after that. Chief executive Johan Lundgren could be forgiven for feeling assailed on all sides, and not just by a raging virus. Founder and major shareholder Stelios Haji-Ioannou rose from lockdown to fling more allegations against the “scoundrel” directors clipping the wings of his golden goose. Unions accused the airline of needlessly axing jobs and leaving trainee pilots in limbo. The Department for Transport continued to issue travel-corridor directives every Thursday, bringing destinations in or out of quarantine, before finally banning outbound travel. And consumer groups berated easyJet for failing to refund ensuing millions of cancelled journeys in good time.
Lundgren is now having more luck selling actual planes than he is tickets. While easyJet said in August it had concluded its plans to sell and lease back aircraft, two more deals were struck in recent weeks, flipping a total of 43 Airbus A320s this year from home-owned to long-term rentals, in order to raise funds. EasyJet now owns around 40% of its fleet outright. That fleet has been trimmed to 337 planes, and ambitions for growth are expected to be revised again.
Right now, nothing is easy, and there is precious little jetting. Only half as many flights as last week will take off this week – down to a twelfth of the schedule this time a year ago. The great hope – which sent the airline’s share price rocketing 35% in hours last Monday – is, of course, the development of a vaccine. At easyJet, talk has been of pent-up demand from people desperate for a holiday – but the airline still regards 2023 as the earliest likely date of proper recovery.
However, Ryanair’s Michael O’Leary, with the confidence of a man taking his Pfizer jab with a shot of testosterone, has now predicted that next summer will already see 80% of customers back flying. For good measure, he promised to pump up Ryanair’s fleet with newly relicensed Boeing 737 Max aircraft. Whether Lundgren strikes a similar tone of optimism will be interesting. The Swede was possibly more prescient than rivals in spotting the trouble emerging from Wuhan, given O’Leary was still telling investors in February that it would have no impact.
Regardless, neither could change course before their fleets were grounded – and the fortunes of both still remain primarily in the hands of scientists. EasyJet, with more than £2bn in the bank, knows it can survive well until 2021. But until the vaccine has taken effect, it may feel like November for a long time yet.