EasyJet (EZJ.UK) announced today plans to cut thousands more flights during the July -September period due to capacity issues and labour shortages at Amsterdam and London Gatwick airports, which are major bases for the company. The British low-cost airline group now plans to reach 90% of its pre-pandemic capacity during the summer period, which represents a significant drop compared to last month's forecast of 97%, which would have been around 160,000 flights.
- Company's CEO Johan Lundgren believes reducing the schedule now would minimize last-minute cancellations that had a bigger impact on customers.
- "It is necessary to build further resilience into the flying schedule this summer by proactively cancelling a number of flights, providing customers with advanced notice and rebooking options," Lundgren said.
- Despite this negative news, global airlines are now expected to record a $9.7 billion loss in 2022, a significant improvement from a revised $42.1 billion loss in 2021, the International Air Transport Association (IATA) announced today, and may record some profits in 2023.
- Many of the major airlines struggle from high levels of debt and rising fuel prices which negatively affects profits. Willie Walsh, director general of IATA said confused government policies had worsened disruption seen particularly in Europe as flying restarted. "The cost of government mismanagement was substantial. It devastated economies, disrupted supply chains and destroyed jobs," Walsh said.
- During the pandemic, airlines and airports have been forced to lay off workers who are now finding another job, and many of them do not intend to return to their previous employer, resulting in labor shortages. The number of flight bookings in the coming months has increased, but the specter of recession and problems with employees make the future of this sector uncertain in the long term.
Number of flights is rising, however still remains well below pre-pandemic levels. Source: Statista.com
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EasyJet (EZJ.UK) stock plunged to 20-month lows recently. On Monday price fell 3%, however sellers failed to break below major support at 4.18 and price launched a recovery move. Local downward trendline should act as the first line of resistance. Source: xStation5
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