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28 Jan 2021 | 07:01

EasyJet cuts Q2 capacity on new Covid restrictions as revenues plunge

(Sharecast News) - Budget airline easyJet said it expected to fly no more than 10% of 2019 capacity in the second quarter as tighter coronavirus restrictions triggered an 88% slump in revenue for the three months to December 31. The company, hammered by the slump in passenger numbers due to Covid-19, said first quarter group revenue plummeted to £165m, while passenger numbers fell 87% to 2.9 million.

EasyJet said cost cuts had seen cash burn fall to £40m per week in a fully grounded scenario.

"At this stage, given the continued level of short-term uncertainty, it would not be appropriate to provide any further financial guidance for the 2021 financial year. Customers are booking at a later stage and visibility remains limited," the company said on Thursday.

EasyJet faces an even tougher time in its key UK market after the government on Wednesday introduced new measures on the travel industry, including demanding that passengers justify why they are leaving the country.

"These restrictions and the continued uncertainty regarding their future removal are the main driver of decreased customer demand," easyJet said.

"Subject to continued progress on vaccinations, together with the future relaxation of government travel restrictions across Europe, we are anticipating a release of pent-up demand for travel."

The company added that research it conducted among 5,000 European consumers between January 8 and 20 this year showed that 65% have or plan to make a travel booking in 2021, with existing easyJet customers even more likely to travel rising to almost three quarters planning a trip this year.

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