As the impact of Covid-19 continues, easyJet looks to the future with a flexible fleet and expects to capitalise on the forecasted growth in package holiday sales, which could pay dividends to the airline’s recovery.

easyJet, one of Europe’s leading low-cost carriers, has revealed it has recorded a colossal year-end loss of £1.27bn ($1.68bn), its first full loss in 25 years of operation. The grounding of the airline’s fleet from the end of March for 11 weeks and poor demand lead to this record loss.

The airline is looking towards greater cost control, raising liquidity through sale and leaseback agreements and responding quickly to changing consumer demand. These actions should help the airline to recover post-Covid-19.

Package holiday bookings could lead recovery

easyJet is pinning its hopes on package holidays for revenue generation as it looks towards 2021. The airline believes that package holidays will become more popular than flight-only sales in the short-term, as it seeks to drive business through its year-old easyJet holidays arm.

European package holiday market value is expected to increase at a CAGR of 5.3% from 2019 to 2024, according to GlobalData. With popularity expected to grow, easyJet will be in a promising position to take advantage of this booking trend.

Amidst uncertainty, customers are looking to book package holidays which offer better protection. Travellers cannot afford to forego the benefits of the protection offered by the UK CAA’s ATOL protection scheme on package holidays, which could contribute to the popularity of these bookings.

Fleet flexibility will allow the airline to respond quickly to fluctuating demand

The airline has negotiated preferential lease agreements and delayed aircraft deliveries to develop a flexible, lower risk fleet as it looks to the future for the bounce-back of traveller demand, which may not occur until 2024 according to IATA.

In 2021, the airline plans to operate a fleet of between 302 and 322 aircraft, giving it the flexibility to access extra aircraft if necessary. This smart strategy will allow the airline to reduce its short term costs and be able to react to any sudden changes in demand.

Flexibility is key for the airline and it has, during the Covid-19 pandemic, proven it can respond quickly in the event of a sudden surge in demand. Following the addition of the Canary Islands onto the UK travel corridor list, the airline experienced an 876% sales uplift in five days and added 180,000 seats from the UK within 24 hours, further demonstrating the need to be flexible and ready to respond. The fleet buffer will allow the airline to respond quickly without creating any unnecessary costs.

As Europe continues to battle with a second spike of infections, only time will tell if easyJet’s flexible fleet approach and focus on package holidays will pay off. However, the company has demonstrated a willingness to be proactive, which will be key for all companies in the travel and tourism sector in the short-to-medium-term.

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