The boss of easyJet has said the travel industry is much better prepared for this summer than last year, when staff shortages led to chaos at airports – but passengers are likely to pay significantly more to get away.
The budget airline lifted its profit outlook for this year after summer bookings rose and passenger numbers over Easter returned to pre-pandemic levels. Fares have risen sharply, although Johan Lundgren, the easyJet chief executive, defended the increase as being largely driven by fuel and comparable to wider cost-of-living rises in supermarkets.
Revenue per seat, which is mainly fares, rose by 31% in the last quarter and is expected to be 20% higher than 2022 until the end of June, although it “remains to be seen” where demand would push fares in summer. Lundgren said the £12 average increase in the last few months was “a couple of coffees and a snack in an airport”.
He said the airline had completed its largest ever crew recruitment drive, after hiring around 3,000 people in the last year.
“We are fully recruited in terms of cabin crew and pilots but of course the difficulty is that you will see weaknesses across the industry in other parts of the chain – but everybody is significantly better prepared than they were at this point last year,” he said.
“Strikes are likely to continue … what you have to do is be able to mitigate the impact” by having extra staff to help deal with delays and booking travellers on to other flights, he added. There have been strikes in various sectors across Europe, affecting travel at German and French airports in recent weeks.
While Ryanair has said French air traffic control strikes left over 600,000 passengers’ flights cancelled, Lundgren said easyJet’s cancellations were around “quarter of that”. Passenger levels over Easter were back to 2019 levels, despite disruption from the strikes through April.
Airlines hope to avoid a repeat of last summer when staff shortages led to massive queues at airports, delays and tens of thousands of flights being cancelled. The travel industry struggled to cope with a surge in demand after governments ditched Covid-19 travel restrictions.
Since then, the industry has bounced back, with people keen to travel again following Covid lockdowns and travel bans.
The cost of living crisis has not dented demand, Lundgren said. “While there is a squeeze on people’s incomes, people prioritise holidays and travel even more than they did before. This is driven by the fact that people are refocusing on experiences and doing things rather than investing in their homes, perhaps,” he added.
He said holidaymakers booked longer breaks of up to 12 days during the pandemic, but this had since reduced to seven days as patterns returned to normal. However, there are some other changes: 23% of bookings are now made on mobile phones compared with 16% before the pandemic, and there has been a 10% increase in the number of people paying extra to choose their seats.
EasyJet has increased capacity, by 40% from January to March, and expects to be back to about pre-pandemic levels in the summer. Its package holidays are 80% sold and with UK demand strong, the company expects 60% growth year on year, up from 50% estimated previously.
Traditional beach destinations are popular including Málaga, Menorca, Faro and Alicante, as well as city breaks such as Amsterdam.
Despite a 71% rise in fuel costs, the airline expects to beat analysts’ expectations of a profit of £260m this year. Last year, easyJet made a headline loss before tax of £178m. However, it will still be in the red in the first half with a loss of between £405m and £425m expected.
Lundgren declined to comment on a shareholder revolt at the annual meeting in February that saw 20% oppose the airline’s remuneration report, which included a bumper £3m for the chief executive.
