Airline easyJet said it is already seeing some impact on demand from the new Omicron variant of coronavirus as it revealed annual losses of more than £1bn.
The low-cost carrier said it has seen signs that demand is softening in its current quarter, although it is “too soon to say” what impact the new strain of Covid-19 will have on the industry.
New restrictions came into force on Tuesday in an effort to control the new variant, with the Government ruling that all travellers returning to the UK must now take a PCR test and self-isolate until they receive a negative result.
Many countries have also moved to tighten their borders, with the UK Government announcing a ban on travel from 10 countries in southern Africa where the variant is thought to be in circulation, and restrictions are growing across Europe.
EasyJet said: “It’s too soon to say what impact Omicron may have on European travel and any further short-term restrictions that may result.
“However, we have prepared ourselves for periods of uncertainty such as this.”
The comments came as the company posted statutory pre-tax losses of £1.04bn for the year to September 30, compared with losses of £1.27bn the previous year, which was the first full-year loss in its 25-year history.
On an underlying basis, pre-tax losses widened from £835m to £1.14bn.
Despite the current uncertainty, easyJet said it is still hopeful of a recovery to pre-pandemic levels of trading over its current year.
It said: “We are still seeing good levels of new bookings for the second half and we still expect that the fourth quarter of 2021/22 will see a return to near pre-pandemic levels of capacity as people take their long-awaited summer holidays.”
The group said it expects to ramp up its flights programme to around 65% of pre-pandemic levels in the current quarter to the end of December, increasing this to 70% in the three months to March and a return to around 2019 levels in the summer quarter.
It also stressed it has seen demand accelerate recently, with a “strong performance” for October half-term, the ski season and Christmas.
But easyJet held off from giving full financial guidance for the year, given the “continued level of short-term uncertainty”.
Chief executive Johan Lundgren said: “We have seen an encouraging start to this year, with strong demand returning for peak winter holiday periods coupled with increasing summer demand, with fourth-quarter capacity expected to be close to full-year 2019 levels.”
He added: “We remain mindful that many uncertainties remain as we navigate the winter, but we see a unique opportunity for easyJet to win customers and take market share from rivals in this period.”