easyJet PLC (LON:EZJ) said it expects capacity to crash 90% in the second quarter as it burns £40mln per week.
The budget airline said the European slot waiver mechanism in place for this winter allows to match capacity against the lower demand, while the EU and UK authorities are discussing a revised slot waiver for the Summer 2021 season.
The FTSE 250 group added it focuses on cash generative flying to minimise losses and cash burn as well as retaining the flexibility to ramp up capacity quickly when demand picks up.
Moreover, it forecasts legacy carriers will free up capacity around Europe as they are “dramatically scaling back” their short haul operations, so competition will be lower in a post-pandemic world.
Holidays for Winter 2021/22 were launched in December and are experiencing “very positive demand” while bookings for Summer 2021 are currently significantly ahead of last year but many customers are waiting for further clarity on quarantine rules.
In the quarter to December 31, passenger numbers plummeted 87% to 2.9mln as capacity dived 82% to 4.4mln seats. As a result, group revenue was 88% lower at £165mln.
As of January 25, easyJet had access to £2.5bn of liquidity.
Group headline costs excluding fuel were reduced by 52% after the firm let go a third of its staff and made seasonal contracts for its UK-based pilots, as well as furloughing employees in several countries.
It also secured new ground handling contracts at London Gatwick and at all its Swiss and Spanish airports and took steps to make fuel usage more efficient.