EasyJet warns 'too soon' to know Omicron impact| MENAFN.COM

Wednesday, 18 May 2022 12:39 GMT

EasyJet warns 'too soon' to know Omicron impact


(MENAFN- AFP)

British airline EasyJet warned Tuesday it was "too soon" to assess the impact of the Omicron Covid variant on the aviation sector, after logging narrowing annual losses as skies reopened.

The emergence last week of Omicron, a new concerning Covid variant first detected in southern Africa, has prompted some nations including Britain to tighten travel curbs.

"It's too soon to say what impact Omicron may have on European travel and any further short-term restrictions that may result," EasyJet said in a results statement.

"However, we have prepared ourselves for periods of uncertainty such as this."

Elsewhere in Europe, Scandinavian airline SAS expressed optimism Tuesday despite the emergence of Omicron -- but cautioned over "prevailing uncertainties" in the industry.

- Demand pick-up -

EasyJet meanwhile revealed "some softening of trading" in the current first quarter, or three months to December.

However, the carrier forecast the fourth quarter would see "a return to near pre-pandemic" capacity levels as people take long-awaited summer holidays.

EasyJet's net loss improved to £858 million ($1.1 billion, 1.0 billion euros) in the reporting year to September, aided by the reopening of air travel.

That contrasted with a vast loss of £1.1 billion last time around, when Covid grounded flights and hammered demand.

The airline, which is based in Luton north of London, added that pretax losses improved to £1.0 billion from £1.3 billion.

Revenues more than halved to £1.5 billion as passenger numbers dived 60 percent, but the group drastically cut costs.

"EasyJet is moving through the pandemic with renewed strength," said Chief Executive Johan Lundgren.

The business had been "transformed" by delivering "significant" cost savings and improving its network and flexibility, he added.

"These initiatives alongside our strong, investment grade, balance sheet provide EasyJet with renewed strength to manage any further Covid related travel disruptions."

In mid-morning deals, EasyJet shares dipped 0.9 percent to 498.20 pence on London's falling stock market.

- 'Eye of storm' -

Interactive Investor analyst Richard Hunter said airlines are "caught in the eye of the storm" of the ongoing Covid crisis.

"While the extent and impact of Omicron are not yet fully understood, the reaction from governments in restricting travel is becoming the norm," Hunter added.

"This begs the questions of how future variants and mutations are dealt with by the authorities, and whether the airlines can even hope to prosper given the stop-start nature of the present recovery."

The new, heavily mutated Covid-19 variant spread across the globe on Sunday, forcing nations to reimpose measures many had hoped were a thing of the past.

Covid vaccine maker Moderna has warned that existing jabs will struggle against the Omicron -- and it could take months to develop a new shot.

"Concern over the Omicron variant and the prospect of further restrictions are the last things EasyJet would have been hoping for," noted Third Bridge analyst Allegra Davies.

"Just as leisure travel was becoming more normalised and business travel was taking off again the last week has served to remind everyone how fragile a return to the skies can be."

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