Airlines pin hopes on winter getaway: BA and Easyjet defy gloom

Airlines shrugged their shoulders at economic doom and gloom to declare that they are expecting a great winter flight schedule.

British Airways owner IAG said sales this summer were “better than expected” and there was “no indication of weakness” for the coming months.

The group, which also owns Spain’s Iberia and Ireland’s Aer Lingus, said its passenger spending has remained strong.

That came despite many forecasting a decline in holiday demand as households grapple with rising inflation.

Meanwhile, the UK’s largest budget airline, Easyjet, said it will carry 20 million passengers in the three months to January – a 30 percent jump from last year.

Easyjet is still laying out fewer flights during the holiday season than before Covid hit, with plans to run at just 83 percent of pre-pandemic levels.

But the airline said its bookings are higher at this point of the year than in 2019. Easyjet’s peak periods – the biannual October, Christmas and New Years – all run at the same capacity level as 2019.

The updates raised the prospect of a return to normalcy for an industry ravaged by two years of restrictions and months of staff shortages.

It also provided much-needed respite for IAG and Easyjet shareholders who have suffered heavy losses this year.

Easyjet shares were up 2.7 percent or 7.6p to 292.7p and IAG shares were up 8 percent or 8.04p to 108.8p.

Easyjet boss Johan Lundgren praised a “record bounce-back” this summer and said there is “continued demand” into next year’s summer.

He said: ‘Our ‘Summer 23′ season went on sale last week and we filled the equivalent of more than four A320 aircraft per minute during opening hours.’

Lundgren said Easyjet returned to profit in the three months to September – usually the busiest time of the year for airlines – with profits of a staggering £545 million.

The airline carried 26.3 million passengers in those three months, 88 percent from the same period before the pandemic.

But the performance was not enough to prevent Easyjet from crashing into its third year of heavy losses since the Covid outbreak.

The short-haul airline has been plagued by massive cancellations, delays and staff shortages, all of which followed the end of two years of travel restrictions.

That saw Easyjet lose up to £190 million for the year to September 30, bringing its total loss since the pandemic to £2.5 billion.

The group faced a further £75million in ‘disruption costs’ this year as airlines and airports struggled to cope with strong demand this summer when restrictions were finally lifted.

It took a hit of £64 million due to the rising value of the US dollar, in which it pays much of its costs, while revenues are mostly in pounds.

And Easyjet said disruption caused by the Omicron Covid variant and the war in Ukraine all caused the losses.

Victoria Scholar, Interactive Investor’s head of investment, said Easyjet was boosted by pent-up demand for summer sun. But the airline could be hit by a cut in consumer spending as the cost of living rises.