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EasyJet: Bookings jump 50% on vaccine news

Easyjet

UK budget airline easyJet’s bookings jumped by 50 per cent last week on positive news about a coronavirus vaccine.

Chief Executive Johan Lundgren cautioned that while the positive vaccine news was a boost, it was still “early days” and he said he could forecast when travel would pick-up.

“There is no visibility really beyond the quarter, because this is all down to the travel restrictions,” he told reporters on a call.

That makes him more downbeat than larger competitor Ryanair RYA.I which forecast a return to 75-80 per cent of pre-crisis traffic by next summer on the vaccine news.
Positive news about the Pfizer vaccine on November 9, which last week sent easyJet shares rocketing by 45 per cent, helped easyJet’s bookings surge 50 per cent last week compared to the previous week said Lundgren, adding that momentum continued this week following news on a Moderna vaccine on Monday.
If travel does not pick up in the coming months, however, investors worry that easyJet could still need to raise extra debt or equity. The company suffered during the pandemic as the British airline rang up a £1.27 billion ($1.68 billion) annual loss, the first in its history.
The airline said it agreed an extension of a £600 million UK government COVID-19 loan on Tuesday, meaning it now has longer to pay back half of the debt, and Lundgren sought to reassure investors that it was well-set for now.

“No, we think we’re in a good position … at this moment in time,” Lundgren said on BBC radio when asked if easyJet would need to raise more money.

He said that the airline would keep its finances under review given the continued uncertainty ahead.

Quarterly cash burn, a gauge watched by investors keen to see costs reduced, improved to 651 million pounds from £774 million in the previous period.
With lockdowns in England, France and Germany, easyJet plans to only fly around 20 per cent of planned capacity for the rest of the year and the CEO said as well as the vaccine, he wanted to see testing as a way to reduce quarantine times to help boost demand.

Shares in the airline traded down 1 per cent to 768 pence at 1008 GMT in a release which Goodbody analysts said contained “no surprises … which can be taken well.”

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