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(Alliance News) - easyJet PLC on Thursday was accused by its founder Stelios Haji-Ioannou of squandering shareholders' money as the company issued a profit warning and suspended dividend payment.
The budget airline said it expects a headline pretax loss in the range of GBP815 million to GBP845 million for the year ended September 30 versus GBP427 million headline pretax profit recorded in the year ago period. Its fourth quarter loss is expected to be slimmer than its third quarter one.
During the fourth quarter, the company carried more than nine million customers with "enhanced bio security measures" in place across its full flight schedule.
Passenger numbers for the full-year halved to 48 million. Load factor for the year decreased by 4.3 percentage points to 87.2%.
Total headline cost for the year decreased by 36% to around GBP3.84 billion, mainly driven by a decrease in capacity flown. Capacity in the fourth quarter was 38% of previously planned levels and revenue was around GBP620 million.
easyJet will not be declaring a dividend for the year.
Chief Executive Johan Lundgren said: "At the beginning of this year, no one could have imagined the impact the pandemic has had on the industry. easyJet has adapted and risen to the challenges presented by the pandemic by taking decisive actions to minimise losses, bolster liquidity and reduce cash burn while launching a major restructuring programme, having completed the UK consultation and commenced consultations in a number of key countries.
"Throughout we have taken a very prudent and conservative approach to capacity and this disciplined approach has seen us deliver a better than expected cash burn outcome in the fourth quarter and will see us continue to focus on profitable flying over the winter season in order to minimise losses and cash burn during the first half of 2021."
Going forward, easyJet plans to fly approximately 25% of planned capacity in the first quarter of financial 2021 but retains the flexibility to ramp up capacity quickly when the company sees demand return.
Lundgren said: "Aviation continues to face the most severe threat in its history and the UK government urgently needs to step up with a bespoke package of measures to ensure airlines are able to support economic recovery when it comes."
The company does not see it fit due to the short-term uncertainty to provide any financial guidance for financial 2021.
In a separate statement, easyJet founder and Stelios Haji-Ioannou lambasted the company: "The easyJet scoundrels must stop squandering shareholders’ money on buying 100 more planes when 75% of the current fleet is just sitting idle on the tarmac."
He went on to say that easyJet lost around GBP1.3 billion of shareholders' equity in the last 12 months.
He said: "Airbus has been convicted in the High Court in London of bribing airlines executives all over the world, who have been pressured into buying more planes than they should - thereby destroying airlines’ shareholder value.
"This has to stop. The UK taxpayer will not get back its GBP600 million in March, 2021, because the scoundrels at easyJet have sent the cash to the kings of corruption in Toulouse."
easyJet shares were down 0.3% at 521.60 pence in London on Thursday morning.
By Greg Roxburgh; gregroxburgh@alliancenews.com
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