EasyJet posted a £394 million ($529 million) pre-tax loss for the year’s first half. This is an improvement on the £350 million deficit they reported over the same period in 2024. Despite the earnings disappointment, the airline remains upbeat about its fiscal year ahead. Going by current bookings, it is indeed on sharp track to meet its optimistic expectations for full-year profit.
The low-cost carrier’s losses are set against a continued trend of recent operational turmoil. EasyJet’s overall headcount is down 3%, to about 116,000 employees. The company is doing all it can to expedite its operations. It plans to shrink its workforce down to 75k-90k as a long term goal.
EasyJet has a positive focus on the future. The airline expects a cash flow windfall, projecting £2 billion in cash flow over 2027 and £3 billion by the end of the decade. According to their latest quarterly report, the airline’s bottom line cash flow skyrocketed by 25%. It’s currently at a record £1.6 billion, smashing the totals of the last few years.
In what Kenton Jarvis, EasyJet’s interim chief executive, called an “extraordinary period” for the airline sector, the company’s fiscal performance reflected a sharp turnaround. He pointed to positive trends in their holiday bookings, specifically within the holidays division. EasyJet expects to see a year-on-year increase of around 25% in the number of passengers carried in this segment.
“Demand looks good for the summer. As you said, our book position for both our third quarter, which ends in June, and our fourth quarter, which ends in September, are ahead of where they were this time last year,” – Kenton Jarvis
Jarvis pointed out that EasyJet’s load factor capacity for the second quarter is forecasted to be booming at 86%. He did admit to persistent capacity strains that continue to affect airlines industry-wide. These strains have been exacerbated by delays caused by Airbus and Boeing in delivering their originally scheduled aircraft.
It’s no secret that the airline industry has been under unprecedented competitive and existential pressures in recent years. In spite of these obstacles, analysts are still cautiously optimistic about EasyJet’s future. Equity analysts at Bank of America, led by Muneeba Kayani, pointed out that EasyJet shares are trading on 7x their FY’25 p/e ratio. This figure is more than ten times lower than their historical average of eleven. They think this idiosyncratic undervaluation is unjustified in light of EasyJet’s strong near-term earnings potential and sound balance sheet.
Deutsche Bank’s Robert Grindle pointed to EasyJet as an example of resilience. He noted that the preceding airline has led the industry in profitability through trade wars and economic uncertainty.
“They have proven even more defensive than peers at a time of trade war confusion, a weak economy and GBP strength,” – Robert Grindle
Even as EasyJet keeps its head above stormy waters, it doesn’t show sign of taking its eyes off rigid cost-control and innovation in improving product. With a growing demand for travel and a commitment to operational efficiency, the airline is positioning itself for potential recovery and growth as it enters the peak summer season.
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