Overview
easyJet, alongside the whole industry, has faced multiple headwinds throughout the 2022 financial year from Omicron, the impact of Russia’s invasion of Ukraine, and operational challenges as demand returned at scale following the widespread removal of travel restrictions across Europe. Despite this, easyJet has delivered a significantly improved performance with headline EBIT profit of £3 million (2021: £1,036 million loss) which includes incremental disruption costs of £78 million compared to FY19. The headline loss before tax in the year was £178 million (2021: £1,136 million) which includes a £64 million loss from balance sheet revaluations.
The business transformation is delivering with easyJet achieving a record headline EBITDAR of £674 million in Q4 2022 with load factors returning to 92% and seat capacity to 26 million. Ancillary products and easyJet holidays are fully embedded and delivering incremental returns to the business.
easyJet is continuing to allocate aircraft to the markets where demand is strongest enabled by slot growth at primary airports. Over the past 12 months we have seen growth at Gatwick, Porto, Lisbon and the Greek islands. Each of these airports has delivered returns above the network average in FY22.
For winter, which is typically a loss-making period, easyJet is investing in building additional resilience. This investment allows for summer 23 preparations to start earlier in response to the tight labour market, where we have already begun our seasonal recruitment campaign. Alongside this, we now have a dedicated team in place to process employment reference checks as efficiently as possible. easyJet, like all airlines, is seeing cost pressures including fuel, strengthened US dollar and wage inflation.
Peak holiday weeks this winter, such as October half term and Christmas week in the UK, are back to normal levels of volume. Through these key periods, ticket yields are showing strength on the prior year, with the Christmas period’s ticket yield currently up c. 18%. Visibility over bookings in the second half remains low, however Easter booked ticket yields are strong and booked load factors for Easter are ahead of the prior year.
easyJet goes into the 2023 financial year with one of the strongest balance sheets in European aviation. This financial strength, combined with our leading low-cost proposition at primary airports provides a key differentiator for customers, making it easy for customers to switch towards value. easyJet’s historic performance in a challenging economic environment where the consumer was squeezed has been strong, as evidenced in 2008/09 during the global financial crisis when easyJet delivered increased margins1 as well as capacity growth.
Revenue
Total revenue increased by 296% to £5,769 million (2021: £1,458 million) in line with capacity increasing to 81.5 million seats (2021: 28.2 million), due to the relaxation of pandemic-related travel restrictions relative to the prior year, strong growth in the easyJet holidays business and the step change in our ancillary offering.
Passenger revenue increased by 282% to £3,816 million (2021: £1,000 million) as we flew increased levels of capacity compared to the same period last year. Passenger RPS increased by 32% to £46.80 (2021: £35.48) as demand returned, with travel restrictions easing through the year and easyJet’s primary airport network driving yield growth.
Group ancillary revenue increased by 326% to £1,953 million (2021: £458 million) as capacity increased and as easyJet holidays continues its rapid growth. Airline ancillary revenue per seat also increased by 29% to £19.43 (2021: £15.06) as we continue to see incremental benefits from ancillary products which have been launched since H1 of FY21.
Costs
Group headline costs excluding fuel and FX gains increased by 106% to £4,604 million (2021: £2,233 million), driven by an increase in capacity flown as well as incremental disruption costs of £78 million compared to FY19 and one-off resilience actions taken in order to ensure a stable operation during the fourth quarter.
easyJet recorded a £64 million loss from foreign exchange on balance sheet revaluations (2021: £10 million gain), related to the impact of a weaker sterling on our net foreign currency-denominated liabilities.
Airline headline cost per seat at constant currency decreased by 25% to £68.11 (2021: £90.73). Headline Airline cost per seat excluding fuel at constant currency decreased by 32% to £52.66 (2021: £77.57).
Financial Summary
Headline loss before tax of £178 million (2021: £1,136 million loss).
Total revenue increased by 296% to £5,769 million (2021: £1,458 million) predominantly due to the increase in capacity flown and ancillary products continuing to deliver incremental revenue.
Group headline costs increased by 129% to £5,947 million (2021: £2,594 million), primarily due to the increase in flown capacity.
Reported loss before tax of £208 million (2021: £1,036 million loss).
Non-headline loss of £30 million (2021: £100 million gain). Non-headline items consist primarily of losses from the sale and leaseback of aircraft and the return of slots in the year at Berlin Brandenburg airport following the right-sizing of our operations from 18 to 11 aircraft.
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