EasyJet expands its summer schedule on travel rebound

Bloomberg

EasyJet Plc is seeing a stronger than anticipated rebound in passenger demand following the lifting of lockdowns, prompting it to accelerate the addition of flights.
The stock rose the most in two months after EasyJet said that its aircraft flew 84% full in July. With bookings for late summer ahead of projections the carrier will operate 40% of capacity in the quarter through September, up from the planned 30%.
“I am really encouraged that we have seen higher than expected levels of demand,” Chief Executive Officer Johan Lundgren said. “We have now completed more than one month of restart operations and are seeing encouraging performance across the network.”
With Covid-19 infection levels declining in most of Europe, governments have been easing travel restrictions. Britain’s biggest low-cost carrier was among the first European airlines to begin rebuilding up services, though has done so at a slower pace, helping it to cope with fluctuations in demand such as that created by the reintroduction of UK curbs on people arriving from Spain.
Sanford C Bernstein analyst Daniel Roeska said in a note that EasyJet’s seat-occupancy level and a lower-than-expected cash outflow were both “modestly encouraging.”
Shares of the Luton, England-based carrier traded 11% higher at 565 pence in London, paring the decline this year to 60%. A comparison of July traffic shows that EasyJet has been less aggressive than rival discounters in bringing back flights, resulting in higher occupancy levels. The UK airline attracted
2 million passengers last month, whereas Ireland’s Ryanair Holdings Plc, Europe’s largest no-frills carrier, lured 4.4 million customers but with 72% of capacity filled.
Smaller Wizz Air Holdings Plc, the low-cost leader in Eastern Europe, has been faster in building up its schedule and carried 1.8 million passengers with a lower load factor of 60.5%.
Roeska said EasyJet’s steadier approach may reflect either lower demand on the routes it serves, which have a higher mix of business passengers, or more caution on the part of management. The carrier said its undertaking only profitable flights, rather than slashing fares to fill planes.
The threat from flareups in the virus was reinforced Monday when booking agent Hays Travel Ltd said it would cut up to 878 jobs, or 20% of its workforce, after the UK move to curb Spanish visits triggered the cancellation of hundreds of thousands of holidays.